Prepare the cash flow statement under the direct format for Michael Hart Associates using the data provided
Question:
Prepare the cash flow statement under the direct format for Michael Hart Associates using the data provided in E22-7.
In E22-7
Michael Hart Associates closed its books for the current year. The firm provided the following comparative balance sheets and income statement.
Michael Hart Associates
Income Statement
For the Year Ended December 31
Current Year
Sales…………………………………………… $ 795,000
Cost of Goods Sold……………………………. 477,000
Gross Profit…………………………………….. $ 318,000
Selling, General, and Administrative Expenses… $ 83,250
Bad Debt Expense………………………………. 8,000
Depreciation Expense…………………………… 22,000
Total Operating Expenses……………………….. $ 113,250
Income before Interest and Taxes……………….. $ 204,750
Interest Expense…………………………………. $ (7,369)
Dividend Income………………………………… 1,650
Income Before Tax………………………………. $ 199,031
Income Tax Expense…………………………….. (79,612)
Net Income………………………………………. $ 119,419Step by Step Answer:
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella