1. Operating Cash Flows: Direct Method
2. Belnap Company has provided the following partial comparative balance sheets and the income statement for 20X2.
3. Belnap Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2
4. Current assets:
5. Accounts receivable $140,000 $112,600
6. Inventories 50,000 24,000
7. Current liabilities:
8. Accounts payable 120,000 95,000

Belnap Company Income Statement For the Year Ended December 31, 20X2

Revenues $480,000

Gain on sale of equipment 20,000

Cost of goods sold (260,000)

Depreciation expense (50,000)

Interest expense (10,000)

Net income $180,000

Required:

1. Compute operating cash flows using the direct method.