Repeat the requirements in BE22-10 using the indirect method. In BE22-10 Operating Activities Section, Direct Method. Rodent

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Repeat the requirements in BE22-10 using the indirect method.

In BE22-10

Operating Activities Section, Direct Method. Rodent World Exotic Pet Shops, Incorporated reported the following comparative balance sheets and income statement for the current year. Prepare the operating activities section of the statement of cash flows using the direct method. Assume accrued expenses relate to selling, general and administrative expenses.

Rodent World Exotic Pet Shops

Income Statement

For the year ended December 31

Sales……………………………………………….               $ 80,085

Cost of Goods Sold……………………………….           48,051

Gross Profit………………………………………..               $ 32,034

Selling, General, and Administrative Expenses…...             $ 10,700

Depreciation Expense………………………………       2,400

Total Operating Expenses…………………………..             $ 13,100

Income Before Interest and Taxes………………….             $ 18,934

Interest Expense…………………………………….            $ (4,000)

Interest Revenue……………………………………       3,400

Income Before Tax…………………………………             $ 18,334

Income Tax Expense……………………………….            (7,334)

Net Income…………………………………………             $ 11,000

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Intermediate Accounting

ISBN: 978-0132162302

1st edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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