Net Income for the Hot Springs Company for the Most

Essay

Net income for the Hot Springs Company for the most recent year was $150,000,consisting of $865,000 of revenues,$360,000 of cost of goods sold,and $365,000 of operating expenses.The following changes in current assets and current liabilities have been identified:
1.Accounts receivable increased by $85,000.
2.Inventory decreased by $37,500.
3.Accounts payable increased by $82,500.
4.Accrued operating expenses payable decreased by $45,000.
Required:
Calculate the cash flows from operating activities for the year,applying the direct method.Identify the individual amounts that would be disclosed in the statement of cash flows where possible.