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The income statement for Piura Merchandising Corporation is as follows: Piura Merchandising Corporation Income Statement At...

The income statement for Piura Merchandising Corporation is as follows: Piura Merchandising Corporation Income Statement At December 31, 2015 Sales $ 1,525,000 Less: Cost of goods sold Beginning inventory $ 360,000 Purchases 730,000 Ending inventory (245,000) (845,000) Less: Depreciation expense (59,000) Less: Amortization of patent (20,000) Less: Wages expense (62,000) Less: Insurance expense (36,000) Income before taxes $ 503,000 Less: Income taxes (all current) (105,000) Net income $ 398,000 Other information is as follows: A. Accounts payable decreased by $23,000 during the year. B. Accounts receivable increased by $19,500. C. All wages were paid at the beginning of the year; at the end of the year, wages payable had a balance of $10,500. D. Prepaid insurance increased by $21,000 during the year. Prepare a schedule that provides the operating cash flows for the year using the indirect method. Prepare a schedule that provides the operating cash flows for the year using the indirect method. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Piura Merchandising Corporation Operating Cash Flows Using the Indirect Method 1 Cash flows from operating activities: 2 3 Add (deduct) adjusting items: 4 5 6 7 8 9 10 11

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Piura Merchandising Corporation
Statement of Cash Flow (Using Indirect Method)
For the year ended,31 DECEMBER
Particulars Amount
$
Cash flow from opreating activities
Net Income 398000
Adjustments to reconcile net income to net cash provided by opreating activities
Adjustment for non cash effects
Depreciation 59000
Amortization of patents 20000
Change in opreating assets & liabilities
Increase in accounts receivable -19500
Increase in prepaid insurance -21000
Decrease in accounts payable -23000
Increase in wages payable 10500
Net cash flow from opreating activities (a) 424000
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