Presented below are two independent situations.

Situation A: Chenowith Co. reports revenues of €200,000 and operating expenses of €110,000 in its first year of operations, 2015. Accounts receivable and accounts payable at year-end were €71,000 and

€39,000, respectively. Assume that the accounts payable related to operating expenses. (Ignore income taxes.)

Instructions Using the direct method, compute net cash provided (used) by operating activities.

Situation B: The income statement for Edgebrook Company shows cost of goods sold €310,000 and operating expenses (exclusive of depreciation) €230,000. The comparative statements of financial position for the year show that inventory increased €21,000, prepaid expenses decreased €8,000, accounts payable (related to merchandise) decreased €17,000, and accrued expenses payable increased

€11,000.

Instructions Compute

(a) cash payments to suppliers and

(b) cash payments for operating expenses.