Chapter 4, Problem 4.17E

Statement of cash flows; indirect method

• LO4–8

Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2018 fiscal year was $624,000. Depreciation and amortization expense of $87,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash:

Decrease in accounts receivable	$22,000
Increase in inventories	9,200
Increase prepaid expenses	8,500
Increase in salaries payable	10,000
Decrease in income taxes payable	14,000

Required:

Prepare the operating activities section of the 2018 statement of cash flows.

Chew Corporation prepares its statement of cash flows using the indirect method of reporting operating activities. Net income for the 2018 fiscal year was $1,250,000. Depreciation expense of $140,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: