The income statement of Dillon Company is presented here. DILLON COMPANY Income Statement For the Year Ended

Question:

The income statement of Dillon Company is presented here.

DILLON COMPANY

Income Statement

For the Year Ended November 30, 2011

Sales ............... $7,700,000

Cost of goods sold

Beginning inventory .......... $1,900,000

Purchases .............. 4,400,000

Goods available for sale ......... 6,300,000

Ending inventory ........... 1,400,000

Cost of goods sold ........... 4,900,000

Gross profit ............. 2,800,000

Operating expenses ........... 1,150,000

Net income ............. $1,650,000

Additional information:

1. Accounts receivable increased $250,000 during the year, and inventory decreased $500,000.

2. Prepaid expenses increased $150,000 during the year.

3. Accounts payable to suppliers of merchandise decreased $340,000 during the year.

4. Accrued expenses payable decreased $100,000 during the year.

5. Operating expenses include depreciation expense of $90,000.

Instructions

Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2011, for Dillon Company, using the indirect method.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...