Question

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

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

Homework Answers

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
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