P13-3A A. Prepare the operating activities section - indirect method
The income statement of Whitlock Company is presented here.
	WHITLOCK COMPANY
	Income Statement
	For the Year Ended November 30, 2015
	Sales revenue				$7,700,000
	Cost of goods sold
	Beginning inventory			$1,900,000
	Purchases			4,400,000
	Goods available for sale			6,300,000
	Ending inventory			1,400,000
	Total cost of goods sold				4,900,000
	Gross profit				2,800,000
	Operating expenses				1,150,000
	Net income				1,650,000
Additional information:
1.	Accounts receivable increased $200,000 during the year, and inventory decreased $500,000.
2.	Prepaid expenses increased $150,000 during the year.
3.	Accounts payable to suppliers of merchandise decreased $340,000 during the year.
4.	Accrued expenses payable decreased $100,000 during the year.
5.	Operating expenses include depreciation expense of $70,0000.

Instructions: Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2015, for Whitlock Company, using the indirect method.

B. Assume that in 2015, accounts receivable increased $180,000, inventory decreased $475,000; prepaid expenses decreased $50,000, and accrued expenses payable increased $75,000. Show the impact of these changes on the operating activities section of the statement of cash flows.

WHITLOCK COMPANY Partial Statement of Cash Flows For the Year Ended November 30, 2015 Cash flows from operating activities Value Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense Increase in accounts receivable Decrease in inventory Increase in prepaid expenses Decrease in accounts payable Decrease in accrued expenses payable Value Value Value Value Value Value Net cash provided by operating activities