The changes in Northrup Corporation's balance sheet account balances for last year appear below:

	Increases (Decreases)
Asset and Contra-Asset Accounts:
Cash and cash equivalents	$ 4,000
Accounts receivable	$ (4,000)
Inventory	$ (2,000)
Prepaid expenses	$ 2,000
Long-term investments	$ 40,000
Property, plant and equipment	$ 25,000
Accumulated depreciation	$ 68,000
Liability and Equity Accounts:
Accounts payable	$ (6,000)
Accrued liabilities	$ 8,000
Income taxes payable	$ (8,000)
Bonds payable	$ (70,000)
Common stock	$ 10,000
Retained earnings	$ 63,000

The company’s income statement for the year appears below:

Income Statement
Sales	$ 980,000
Cost of goods sold	540,000
Gross margin	440,000
Selling and administrative expense	310,000
Net operating income	130,000
Income taxes	39,000
Net income	$ 91,000

The company declared and paid $28,000 in cash dividends during the year. It did not dispose of any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by (used in) operating activities.

On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:

Answer rating: 100% (QA)

SOLUTION To determine the cost of goods sold COGS adjusted to a cash basis on the statement of cash ... View the full answer