Question

The income statement of Bridgeport Corporation is presented here. BRIDGEPORT CORPORATION Income Statement Year Ended November 30, 2018 Sales $8,100,000 Cost of goods sold 4,950,000 Gross profit 3,150,000 Salaries expense 863,000 Operating expenses 222,000 Depreciation expense 90,000 Income before income tax 1,975,000 Income tax expense 245.000 Net income $1,730,000 Additional information: 1. Accounts receivable increased $400,000 during the year, and inventory decreased $540,000. 2. Prepaid expenses, which relate to administrative expenses, increased $200,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $420,000 during the year. 4. Accrued salaries payable decreased $165,000 during the year. 5. Income tax payable increased $55,000 during the year.

Answer 1

Statement of Cash flows 1,730,000 Ihome I Amount ($) Particulars Cash flow from from operating activities Net Income Adjustments to reconcile het Add: Depreciation Expense 90,000 Less: Increase in Account (400,000) Receivables Add: Decrease in Inventory 540,000 Less: Increase in Prepaid (200,000) expense sess; Decrease in Accounts (420,000) Payable Less: Decrease in salaries (165,000) e payable Add: Increase in Income tax 55,000 (500,000) e payable Net Cash flow from operating 1, 230,000 activities