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Homework answers / question archive / The following income statement and selected balance sheet account data are available for Treece, Inc
The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2005: TREECE, INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31,2005
Revenue: Net sales Dividend income Interest income Gain on sales of marketable securities . $2,850,000 . 104,000 . 70,000 .. 4,000 Total revenue and gains $3,028,000 Costs and expenses: Cost of goods sold $1,550,000 Operating expenses 980,000 Interest expense 185,000 Income taxes . 90,000 Total costs and expenses .. 2,805,000 Net income $ 223,000 END OF YEAR BEGNING OF YEAR Selected account balances: Accounts receivable $ 650,000 $ 720,000 Accrued interest receivable 9,000 6,000 Inventories 800,000 765,000 Short-term prepayments 20,000 15,000 Accounts payable (merchandise suppliers) 570,000 562,000 Accrued operating expenses payable 65,000 94,000 Accrued interest payable 21,000 12,000
Accrued income taxes payable 22,000 35,000 Additional Information 1. Dividend revenue is recognized on the cash basis. All other income statement amounts are recognized on the accrual basis. 2. Operating expenses include depreciation expense of $115,000. Instructions a. Prepare a partial statement of cash flows, including only the operating activities section of the statement and using the direct method. Place brackets around numbers representing cash payments. Show supporting computations for the following: 1. Cash received from customers 2. Interest and dividends received 3. Cash paid to suppliers and employees 4. Interest paid 5. Income taxes paid b. Also, showing the computation of net cash flows from Operating activities by the indirect method. (10)
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