Question - The income statement of Guesser Company is shown below.
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GUESSER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2007
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Sales
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$755,000
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Cost of goods sold
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543,000
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Gross profit
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212,000
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Operating expenses
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Selling expenses
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$52,000
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Administrative expenses
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89,000
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141,000
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Net Income
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$71,000
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Additional information:
1. Accounts receivable decreased $63,000 during the year.
2. Inventory increased $38,000 during the year.
3. Prepaid expenses increased $12,000 during the year.
4. Accounts payable to increased $25,000 during the year.
5. Accrued expenses payable increased $6,000 during the year.
6. Administrative expenses include depreciation expense of $20,000.
Instructions - Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2007, for Guesser Company, using the indirect method.