Question

Costco Wholesale Corporation operates more than 600 warehouse stores in the United States and abroad. The following items were in a slightly simplified version of the company’s statement of cash flows for the fiscal year ending August 28, 2011 (in millions):
Increase in merchandise inventories .. $ 642
Net income ........... 1,542
Depreciation and amortization ..... 855
Other noncash expenses ....... 269
Increase in payables ........ 804
Increase in other operating liabilities, net . 451
Increase in receivables .......... 81
The company’s income statement showed (in millions):
Total revenues .......... $88,915
Cost of merchandise ....... 77,739
Operating expenses ........ 8,737
Operating income ......... 2,439
Other expenses, net .......... 56
Income before income taxes ...... 2,383
Income tax ............. 841
Net income ............ $ 1,542
1. Prepare a statement of cash flows from operating activities using the indirect method.
2. Prepare a statement of cash flows from operating activities using the direct method. Assume that all other expenses and income taxes were paid in cash, all operating liabilities relate to operating expenses, and that all depreciation and other noncash expenses are included in operating expenses.



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  • CreatedNovember 19, 2014
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