The income statement of Rodriquez Company is shown below

E23-3 (Preparation of Operating Activities Section - Indirect Method, Periodic Inventory) The income statement of Rodriquez Company is shown below.

RODRIQUEZ COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales $6,900,000
Cost of goods sold
Beginning inventory $1,900,000
Purchases $4,400,000
Goods available for sale $6,300,000
Ending inventory $1,600,000
Cost of goods sold $4,700,000
Gross profit $2,200,000
Operating expenses
Selling expenses $450,000
Administrative expenses $700,000 $1,150,000
Net income $1,050,000

Additional information:
1. Accounts receivable decreased $310,000 during the year.
2. Prepaid expenses increase $170,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.
4. Accrued expenses payable decreased $120,000 during the year.
5. Administrative expenses include depreciation expense of $60,000.

Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2012, for Rodriquez Company, using the indirect method.

Click here for the solution: The income statement of Rodriquez Company is shown below

Data for the Rodriquez Company are presented in E23-3

E23-4 (Preparation of Operating Activities Section—Direct Method) Data for the Rodriquez Company are presented in E23-3.

Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.

Click here for the solution: Data for the Rodriquez Company are presented in E23-3