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	$353,000.00	$277,500.00
4	Inventories	130,000.00	154,000.00
5	Current liabilities:
6	Accounts payable	301,000.00	239,000.00

Tidwell Company

Income Statement

For the Year Ended December 31, 20X2

1	Revenues	$1,200,000.00
2	Gain on sale of equipment	48,000.00
3	Cost of goods sold	(652,000.00)
4	Depreciation expense	(124,000.00)
5	Interest expense	(21,000.00)
6	Net income	$451,000.00

	Required:
	Compute operating cash flows using the direct method.

I already figured out some of the information, use this format:

Tidwell Company

Cash Flows from Operating Activities, Direct Method

For the Year Ended December 31, 20X2

1		Income Statement	Adjustments	Cash Flows
2	Revenues	1200000	75500	1275500
3	Gain on sale of equipment	48000	-48000
4	Cost of goods sold	-652000
5	Depreciation expense
6	Interest expense
7	Net income
8	Net cash from operating activities

Answer 1

Answer-

TIDWELL COMPANY
OPERATING CASH FLOW (USING DIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31,20X2
PARTICULARS	INCOME STATEMENT	ADJUSTMENTS	CASH FLOWS
	$	$	$
Revenues	1200000	($353000-$277500)= $75500	1275500
Gain on sale of equipment	48000	-48000	0
Cost of goods sold	-652000	($154000-$130000)+($301000-$239000) = -86000	-738000
Deopreciation Expense	-124000	124000	0
Interest expense	-21000	0	-21000
Net cash flow from operating activities	451000	65500	516500