Computation of Operating Cash Flows
the Financial Statements of Park

question 55

Essay

Computation of operating cash flows
The financial statements of Park Company provide the following information for the current year:
$$\begin{array} { | l | r | r | } \hline & \begin{array} { c } \text { End of } \\\text { Year }\end{array} & \begin{array} { c } \text { Begirning of } \\\text { Year }\end{array} \\\hline \text { Accourts receivable } & \$ 106 _ { 0 } 000 & \$ 98,000 \\\hline \text { Irventory } & \$ 105,000 & \$ 120,000 \\\hline \text { Prepaid expenses } & \$ 31,000 & \$ 29,000 \\\hline \text { Accounts payable (for irvertory) } & \$ 74,000 & \$ 70,000 \\\hline \text { Accrued liabilities } & \$ 30,000 & \$ 28,000 \\\hline \text { Net sales } & \$ 848,000 & \\\hline \text { Cost of goods sold } & \$ 318 _ { 2 } 000 & \\\hline \text { Expenses (including depreciation of } \$ 43,000 ) & \$ 25,000 & \\\hline\end{array}$$ Using this information, compute for the current year:
$\begin{array}{|l|l|}\hline \text { (a) Cash receipts from customers } & \$\_\_\_\_ \\\hline \text { (b) Cash payments for purchases of inventory } & \$\_\_\_\_ \\\hline \text { (c) Cash payments for operating expenses } & \$\_\_\_\_ \\\hline \text { (d) Net cash from operating activities } & \$ \_\_\_\_\\\hline\end{array}$

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Definitions:

Security Prices

The market price at which a financial security is traded.

Risk Level

The degree of uncertainty associated with the potential for loss or undesirable outcomes in an activity or decision.

Market Efficiency

A condition in financial markets where prices fully reflect all available information, leading to assets being priced accurately and trades being executed fairly.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.