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Video Corporation 12600

Price: $1.99


Video Corporation’s balance sheet revealed the following account balance
information:

Dec. 31, 20X6 Dec. 31, 20X5
Accounts receivable  52,000  57,000
Merchandise inventory  75,000  68,000
Accounts payable  21,000  19,500

The accrual-basis net income was $107,000. In computing net income, the company
recorded $12,600 of depreciation expense; there were no gains or losses from investing
and financing activities.

On the basis of the preceding information, calculate Video’s cash flows from operating
activities by using the indirect method.

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