An income statement for the first year of operations for Patti Company appears below — Sales 390 000 — Dividend revenue — Interest 050

Additional information:

a. Accounts payable, end of year, $13,000.

b. Salaries payable, end of year, $8,450.

c. Inventories, end of year, $26,000.

d. Accounts receivable, end of year, $32,500.

e. Customers’ accounts with credit balances (included in item d), end of year, $2,600.

Required:

Use the direct approach to calculate the cash provided (used) by operating activities for Patti Company.

SOLUTION