joemoran

Using the direct method: (left out three '000)

Step 1: Cash collected from customers

Sales $3,000
+ Decrease in A/R $100
Total = 3,100

Step 2: Cash paid to suppliers
COGS <$1,500>
Increase in Inventory <300>
Total = <1,800>

Step 3:
Cash collected from customers 3,100 - from step 1
Less: Cash paid to suppliers <1,800> - from step 2
Less: Other oper. expenses < 400> - from info in the question
CFO = 900

hope this helps a little...