Based on the information in the following income statement and balance sheet for Monterey Corporation, determine the cash flows from operating activities using the direct method.Monterey CorporationIncome StatementFor Year Ended December 31, 20X2Sales?$504,000?Cost of goods sold327,600 ??Depreciation42,000 ??Other operating expenses 125,500 (495,100)Other gains (losses):??? Gain on sale of equipment? 7,200?Income before taxes?16,100?Income tax expense? (4,800)Net income?$ 11,300?????Monterey CorporationBalance SheetsAt December 31????? 20X2?20X1? Cash$64,650?$55,800? Accounts receivable21,000?29,000? Inventory58,000?52,100? Equipment240,000?222,000? Accumulated depreciation(106,000)
(96,000)Total assets$277,650?$262,900?????? Liabilities:???? Accounts payable$28,400?$23,700? Income taxes payable1,050?1,200? Total liabilities$29,450?$24,900?Equity:???? Common stock$106,000?$106,000? Paid-in Capital in Excess of Par18,000?18,000? Retained earnings124,200?114,000? Total equity$248,200?$238,000?Total liabilities and equity$277,650?$262,900??????
What will be an ideal response?
| Monterey Corporation Cash flows from operating activities (direct method) For Year Ended December 31, 20X2 | ||||
| ? | Cash flows from operations: | ? | ? | ? |
| ? | Cash received from customers | $512,000 | ? | (a) |
| ? | Cash paid for merchandise | (328,800 | ) | (b) |
| ? | Cash paid for operating expenses | (125,500 | ) | Given |
| ? | Cash paid for income taxes | (4,950 | ) | (c) |
| ? | Net cash provided by operations | $ 52,750 | ? | ? |
| ? | ? | ? | ? | ? |
| (a) | Sales | $504,000 | ? |
| ? | Decrease in accounts receivable | 8,000 | ? |
| ? | Cash collected from customers | $512,000 | ? |
| ? | ? | ? | ? |
| (b) | Cost of goods sold | $327,600 | ? |
| ? | Increase in merchandise inventory | 5,900 | ? |
| ? | Purchases of merchandise | 333,500 | ? |
| ? | Increase in accounts payable | (4,700 | ) |
| ? | Cash paid for merchandise | $328,800 | ? |
| ? | ? | ? | ? |
| (c) | Income taxes expense | $ 4,800 | ? |
| ? | Decrease in income taxes payable | 150 | ? |
| ? | Cash paid for income taxes | $ 4,950 | ? |
| ? | ? | ? |
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