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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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