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Question
Martin, Inc.'s, income statement is shown below. Based on this income statement and the other information provided, calculate the net cash provided by operations using the indirect method.
| MARTIN, INC. Income Statement For Year Ended December 31, 2013 | ||
| Sales | $248,000 | |
| Cost of goods sold | 116,000 | |
| Gross profit | $132,000 | |
| Operating expenses: | ||
| Wages and salaries expense | $ 44,000 | |
| Rent expense | 16,000 | |
| Depreciation expense | 30,000 | |
| Other operating expenses | 18,000 | 108,000 |
| Income from operations | $ 24,000 | |
| Gain on sale of equipment | 26,000 | |
| Income before income taxes | $ 50,000 | |
| Income taxes expense | 17,500 | |
| Net income | $ 32,500 | |
Additional information:
| Increase in accounts receivable | $ 4,000 |
| Increase in accounts payable | 16,000 |
| Increase in income taxes payable | 300 |
| Decrease in prepaid expenses | 10,000 |
| Decrease in merchandise inventory | 14,000 |
| Decrease in long-term notes payable | 20,000 |
Answer
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