Service Company had net income during the current year of $122,000. The following information was obtained from Service’s balance sheet: Accounts receivable $22,000 increase Inventory 28,700 increase Accounts payable 14,240 decrease Interest payable 3,180 increase Accumulated depreciation, building 12,340 increase Accumulated depreciation, equipment 27,800 increase Additional Information: Equipment with accumulated depreciation of $15,000 was sold during the year. Cash dividends of $36,000 were paid during the year. Required: Prepare the net cash flows from operating activities using the indirect method. Use a minus sign to indicate any decreases in cash or cash outflows. Service Company Net Cash Flows from Operating Activities Using Indirect Method Cash flows from operating activities: $Net income Adjustments to reconcile net income to net cash flow from operating activities: $- Select -
Service Company had net income during the current year of $122,000. The following information was obtained from Service’s balance sheet: Accounts receivable $22,000 increase Inventory 28,700 increase Accounts payable 14,240 decrease Interest payable 3,180 increase Accumulated depreciation, building 12,340 increase Accumulated depreciation, equipment 27,800 increase Additional Information: Equipment with accumulated depreciation of $15,000 was sold during the year. Cash dividends of $36,000 were paid during the year. Required: Prepare the net cash flows from operating activities using the indirect method. Use a minus sign to indicate any decreases in cash or cash outflows. Service Company Net Cash Flows from Operating Activities Using Indirect Method Cash flows from operating activities: $Net income Adjustments to reconcile net income to net cash flow from operating activities: $- Select -
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Service Company had net income during the current year of $122,000. The following information was obtained from Service’s
| $22,000 | increase | |
| Inventory | 28,700 | increase |
| Accounts payable | 14,240 | decrease |
| Interest payable | 3,180 | increase |
| 12,340 | increase | |
| Accumulated depreciation, equipment | 27,800 | increase |
Additional Information:
- Equipment with accumulated depreciation of $15,000 was sold during the year.
- Cash dividends of $36,000 were paid during the year.
Required:
Prepare the net cash flows from operating activities using the indirect method. Use a minus sign to indicate any decreases in cash or cash outflows.
Service Company
Net Cash Flows from Operating Activities
Using Indirect Method
| Cash flows from operating activities: | ||
|
|
$Net income | |
| Adjustments to reconcile net income to net cash flow from operating activities: | ||
|
|
$- Select - | |
|
|
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