Question

The income statement of Rodriquez Company is shown below.

 

RODRIQUEZCOMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2012

Sales

 

 

 

$6,818,660

Cost of goods sold

 

 

 

 

   Beginning inventory

 

$1,899,830

 

 

   Purchases

 

4,305,520

 

 

   Goods available for sale

 

6,205,350

 

 

   Ending inventory

 

1,609,960

 

 

   Cost of goods sold

 

 

 

4,595,390

Gross profit

 

 

 

2,223,270

Operating expenses

 

 

 

 

   Selling expenses

 

447,790

 

 

   Administrative expenses

 

702,490

 

1,150,280

Net income

 

 

 

$1,072,990

         

 

Additional information:

 

1.

 

Accounts receivable decreased $315,400 during the year.

2.

 

Prepaid expenses increased $171,300 during the year.

3.

 

Accounts payable to suppliers of merchandise decreased $268,860during the year.

4.

 

Accrued expenses payable decreased $127,630 during theyear.

5.

 

Administrative expenses include depreciation expense of$50,600.

 

Prepare the operating activities section of the statement of cashflows using the direct method.