Data for Toby Zed NV are presented in P17.3.

Instructions

Prepare the operating activities section of the statement of cash fl ows using the direct method.

P17.3

The income statement of Toby Zed NV is presented here.

Additional information:

1. Accounts receivable increased €200,000 during the year, and inventory decreased €500,000.

2. Prepaid expenses increased €175,000 during the year.

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

4. Accrued expenses payable decreased €105,000 during the year.

5. Operating expenses include depreciation expense of €85,000.

Toby Zed NV Income Statement For the Year Ended November 30, 2020 Sales revenue 7,500,000 Cost of goods sold Beginning inventory 1,900,000 4,400,000 Purchases Goods available for sale 6,300,000 Ending inventory 1,400,000 Total cost of goods sold 4,900,000 Gross profit Operating expenses 2,600,000 1,150,000 Net income 1,450,000