Partial Balance Sheets and Additional Information Are Listed Below for Rickey

question 73

Essay

Partial balance sheets and additional information are listed below for Rickey Company.
Additional information for 2009:
Net income was $160,000.
Depreciation expense was $20,000.
Required:
Prepare the operating activities section of the statement of cash flows for 2009 using the indirect method.
Rickey Company
Partial Balance Sheets
as of December 31
$\begin{array}{lrr}\text { Assets }&2009&2008\\\text { Cash } & \$ 20,000 & \$ 40,000 \\\text { Accounts receivable } & 85,000 & 70,000 \\\text { Inventory } & 35,000 & 40,000\\\text { Liabilities }\\\text { Accounts payable }&\$62,000&\$80,000\end{array}$

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Definitions:

Cost Of Goods Sold

The total cost of manufacturing or acquiring the products sold by a company during a specific period, excluding indirect costs.

Acid-Test Ratio

A liquidity metric that measures a company's ability to pay off its current liabilities without relying on the sale of inventory.

Balance Sheet

A statement detailing an organization's assets, liabilities, and owners' equity on a certain date.

Sales On Account

Transactions in which a customer purchases goods or services but payment is delayed, typically recorded as receivables on the seller's balance sheet.