Pesci Ltd. is a private company reporting under ASPE. Its income statement and changes in current assets
Question:
Instructions
Prepare the operating activities section of the cash flow statement using the indirect method.
Transcribed Image Text:
PESCI LTD Income Statement Year Ended November 30, 2017 $948,000 490,000 458,000 Cost of goods sold Gross profit Operating expenses Depreciation expense Gain on sale of equipment Profit before income tax Income tax expense Profit $310,000 50,000 (10,000) 350,000 108,000 30,000 78,000 Changes in current assets and current liabilities were as follows: Accounts receivable Inventory Prepaid expenses Accounts payable Dividends payable Income taxes payable decrease $36,000 19,000 2,000 12,000 5,000 4,000 decrease decrease decrease
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Related Book For
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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In order to determine the amount of cash created by operating operations, the indirect technique for preparing the statement of cash flows entails adjusting net income with changes in balance sheet.
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