Question

The following financial statements were furnished by Patton Company:


Patton Company
Income Statement
For the Year Ended November 30, 2011
Sales ................. $40,700
Less cost of goods sold ........... (13,200)
Gross margin ............... 27,500
Less wage expense ............ (10,600)
Less other operating expenses ....... (1,130)
Less depreciation expense .......... (3,560)
Net income (loss) ............ $12,210
In 2011, Patton purchased equipment for $25,000 and sold some equipment for its book value (i.e., no gain or loss resulted).

Required
a. Prepare a statement of cash flows using the indirect method.
b. Prepare the operating portion of Patton’s cash flow statement using the directmethod.


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  • CreatedSeptember 23, 2013
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