E23-3B (Preparation of Operating Activities Section—Indirect Method, Periodic Inventory) The income
statement of Guesser Company is shown below.
FOR THE YEAR ENDED DECEMBER 31, 2012
Cost of goods sold 543,000
Gross profit 212,000
Selling expenses $52,000
Administrative expenses 89,000 141,000
Net income $ 71,000
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.