Question

Water Girl Corp.'s 2013 income statement follows:


WATER GIRL CORP. 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
Amortization expense 12,000
Other expenses 18,000 120,000
Income from operations $ 12,000
Gain on sale of equipment 26,000
Income before taxes $ 38,000
Income tax expense 13,300
Net Income $ 24,700

The company also experienced the following during 2013:


Increase in accounts receivable $ 4,000
Increase in accounts payable (all accounts payable transactions are for inventory) 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

Required: Calculate the company's net cash provided or used by operating activities using the direct method.

Answer

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