The income statement of Marcessa Company is presented

Additional information:
1. Accounts receivable decreased $520,000 during the year, and inventory increased $140,000.
2. Prepaid expenses increased $175,000 during the year.
3. Accounts payable to merchandise suppliers increased $50,000 during the year.
4. Accrued expenses payable increased $165,000 during the year.

Instructions

Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2011, for Marcessa Company, using the indirect method.

Transcribed Image Text:

MARCESSA COMPANY Income Statement For the Year Ended December 31, 2011 Sales Cost of goods sold $5,400,000 Beginning inventory Purchases Goods available for sale Ending inventory $1,780,000 3,430,000 5,210,000 1,920,000 Cost of goods sold Gross profit Operating expenses 3,290,000 2,110,000 Selng expenses Administrative expense Depreciation expense Amortization expense 420,000 525,000 105,000 20,000 1,070,000 $1,040,000 Net income