The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2011.
Revenue:
Net Sales …………………………………… 2,850,000
Divident Income ….. ……………………… 104,000
Interest Income ……………………………. 70,000
Gain on sales of marketable securities …. 4,000
Total Revenue and Gains ………………. 3,028,000
Costs and Expenses:
Cost of good sold ………………………….. 1,550,000
Operating expense ………………………… 980,000
Interest Expense …………………………… 185,000
Income tax expense ………………………. 90,000
Total Costs and Expenses …………….. 2,805,000
Net Income …………………………………. 223,000
Selected account balances:
End of Year Beginning of Year
Accounts recievable ………………………….. 650,000 ……………………. 720,000
Accrued Interest recievable …………………. 9,000 ……………………….. 6,000
Inventories …………………………………….. 800,000 …………………… 765,000
Short term prepayments …………………….. 20,000 ……………………… 15,000
Accounts Payable (merchandise suppliers)…. 570,000 …………………… 562,000
Accrued operating expense payable ………… 65,000 …………………….. 94,000
Accrued Interest Payable …………………….. 21,000 …………………….. 12,000
Accrued income taxes payable ………………. 22,000 ……………………… 35,000
Additional Information:
1. Divident revenue is recognized on the cash basis. All othe rincome statement amounts are recognized on the accrual basis.
2. Operating expenses include depreciation expense of $ 115,000
Instructions:
a) Prepare a partial statement of cash flows, including only the operating activities section of the statement and using the direct method. Place brackets around numbers representing cash payments. Show supporting computations for the following:
1. Cash recieved from customers
2. Interest and dividents received
3. Cash paid to suppliers and employees
4. Interest paid
5. Income taxes paid
6. Cash used in operating activities
7. Net cash flow from operating activities.
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