Problem 11-3B Calculate operating activities—indirect method (LO11-3) Portions of the financial statements for Software Associates are provided below. SOFTWARE ASSOCIATES Income Statement For the year ended December 31, 2021 Net sales $ 710,000 Expenses: Cost of goods sold $ 420,000 Operating expenses 130,000 Depreciation expense 33,000 Income tax expense 49,000 Total expenses 632,000 Net income $ 78,000 SOFTWARE ASSOCIATES Selected Balance Sheet Data December 31, 2021, compared to December 31, 2020 Decrease in accounts receivable $ 10,000 Decrease in inventory 13,000 Increase in prepaid rent 3,000 Decrease in salaries payable 4,000 Increase in accounts payable 7,000 Increase in income tax payable 8,000 Required: Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
Problem 11-3B Calculate operating activities—indirect method (LO11-3) Portions of the financial statements for Software Associates are provided below. SOFTWARE ASSOCIATES Income Statement For the year ended December 31, 2021 Net sales $ 710,000 Expenses: Cost of goods sold $ 420,000 Operating expenses 130,000 Depreciation expense 33,000 Income tax expense 49,000 Total expenses 632,000 Net income $ 78,000 SOFTWARE ASSOCIATES Selected Balance Sheet Data December 31, 2021, compared to December 31, 2020 Decrease in accounts receivable $ 10,000 Decrease in inventory 13,000 Increase in prepaid rent 3,000 Decrease in salaries payable 4,000 Increase in accounts payable 7,000 Increase in income tax payable 8,000 Required: Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 48E: Preparing Net Cash Flows from Operating Activities-Direct Method Colassard Industries has the...
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Problem 11-3B Calculate operating activities—indirect method (LO11-3)
Portions of the financial statements for Software Associates are provided below.
| SOFTWARE ASSOCIATES Income Statement For the year ended December 31, 2021 |
||||||||
| Net sales | $ | 710,000 | ||||||
| Expenses: | ||||||||
| Cost of goods sold | $ | 420,000 | ||||||
| Operating expenses | 130,000 | |||||||
| 33,000 | ||||||||
| Income tax expense | 49,000 | |||||||
| Total expenses | 632,000 | |||||||
| Net income | $ | 78,000 | ||||||
| SOFTWARE ASSOCIATES | |||
| Selected |
|||
| December 31, 2021, compared to December 31, 2020 | |||
| Decrease in |
$ | 10,000 | |
| Decrease in inventory | 13,000 | ||
| Increase in prepaid rent | 3,000 | ||
| Decrease in salaries payable | 4,000 | ||
| Increase in accounts payable | 7,000 | ||
| Increase in income tax payable | 8,000 | ||
Required:
Prepare the operating activities section of the statement of
Transcribed Image Text:Required:
Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash
outflows and any decrease in cash as negative amounts.)
SOFTWARE ASSOCIATES
Statement of Cash Flows (partial)
For the Year Ended December 31, 2021
Cash Flows from Operating Activities:
Adjustments to reconcile net income to net cash flows from operating activities:
Net cash flows from operating activities
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