The income statement disclosed the following items for the current year:Depreciation expense$36,000Gain on disposal of equipment21,000Net income317,500Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows:Increase in accounts receivable$5,600Decrease in inventory3,200Decrease in prepaid insurance1,200Decrease in account payable3,800Increase in income taxes payable1,200Increase in dividends payable850Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Operating Activities Section Cash flows from operating activities: $ Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities $

CFS: It is a financial statement, usually called the statement of cash flows, that represents a fair…

Answered: The income statement disclosed the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The income statement disclosed the following items for the current year:

Depreciation expense	$36,000
Gain on disposal of equipment	21,000
Net income	317,500

Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows:

Increase in accounts receivable	$5,600
Decrease in inventory	3,200
Decrease in prepaid insurance	1,200
Decrease in account payable	3,800
Increase in income taxes payable	1,200
Increase in dividends payable	850

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.


Operating Activities Section

Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:


Changes in current operating assets and liabilities:





Net cash flow from operating activities		$

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