Question

Tidwell Company has provided the following partial comparative balance sheets and the income statement for 20X2.

Tidwell Company

Comparative Balance Sheets

At December 31, 20X1 and 20X2

1		20X1	20X2
2	Current assets:
3	Accounts receivable	$700,000.00	$563,000.00
4	Inventories	250,000.00	300,000.00
5	Current liabilities:
6	Accounts payable	600,000.00	475,000.00

Tidwell Company

Income Statement

For the Year Ended December 31, 20X2

1	Revenues	$2,400,000.00
2	Gain on sale of equipment	100,000.00
3	Cost of goods sold	(1,300,000.00)
4	Depreciation expense	(250,000.00)
5	Interest expense	(50,000.00)
6	Net income	$900,000.00

	Required:
	Compute operating cash flows using the direct method.

Answer 1