Table 17-6
The income statement and partial balance sheet for the Jefferson Company is presented below.
Jefferson Company
Income Statement
For the Year Ended December 31, 2017 
Jefferson Company Partial
Balance Sheet
December 31,2017 
-Refer to Table 17-6.Prepare the operating activities section of the cash flow statement using the indirect method.
Definitions:
Acid-test Ratio
A stringent indicator that determines whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory.
Quick Assets
Assets that can be quickly converted into cash without a significant loss in value, including cash, marketable securities, and accounts receivable.
Current Liabilities
Obligations or debts that a company must pay within one year or within its operating cycle if longer.
Gross Margin Ratio
A financial ratio that measures a company's financial health, calculated by subtracting the cost of goods sold from net sales and dividing by net sales.
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