Question - The income statement of Vince Gill Company is shown below.
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VINCE GILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014
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Sales revenue
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$6,894,890
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Cost of goods sold
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Beginning inventory
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$1,893,390
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Purchases
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4,385,910
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Goods available for sale
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6,279,300
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Ending inventory
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1,600,960
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Cost of goods sold
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4,678,340
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Gross profit
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2,216,550
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Operating expenses
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Selling expenses
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441,730
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Administrative expenses
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691,990
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1,133,720
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Net income
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$1,082,830
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Additional information:
1. Accounts receivable decreased $310,140 during the year.
2. Prepaid expenses increased $172,300 during the year.
3. Accounts payable to suppliers of merchandise decreased $277,480 during the year.
4. Accrued expenses payable decreased $129,500 during the year.
5. Administrative expenses include depreciation expense of $69,330.
Prepare the operating activities section of the statement of cash flows using the direct method.
From the postings in the accounts above, indicate how the information is reported on a statement of cash flows by preparing a partial statement of cash flows using the indirect method. The loss on sale of equipment (November 15) was $5,230.