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JWCL543_ch23_01-08.qxd 6/4/11 8:38 AM Page 1 B EXERCISES 2 E23-1B (Classification of Transactions) Aqua Pools Inc. had the following activity in its...
E23-3B (Preparation of Operating Activities Section—Indirect Method, Periodic Inventory) The income
statement of Guesser Company is shown below.
GUESSER COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012
Sales $755,000
Cost of goods sold 543,000
Gross profit 212,000
Operating expenses
Selling expenses $52,000
Administrative expenses 89,000 141,000
Net income $ 71,000
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.
E23-4B (Preparation of Operating Activities Section—Direct Method) Data for Guesser Company arepresented in E23-3B.
InstructionsPrepare the operating activities section of the statement of cash flows using the direct method.
