Use the above income statement and information about changes in noncash current

Question

Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response)

BEKHAM COMPANY
Income Statement
For Year Ended December 31, 2011   Sales $ 2,416,000   Cost of goods sold 1,183,840   Gross profit 1,232,160   Operating expenses       Salaries expense $ 330,992       Depreciation expense 57,984       Rent expense 65,232       Amortization expenses%u2013Patents 7,248       Utilities expense 26,576 488,032 744,128   Gain on sale of equipment 9,664   Net income $ 753,792

Explanation / Answer

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Please find the answer as follows:

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Cash flows from operating activities Amount Net Income 753792 Add Depreciation Expense 57984 Add Amortization Expense 7248 Less Gain on Sale of Equipment -9664 Less Increase in Accounts Receivable -11750 Less Increase in Merchandise Inventory -25200 Less Decrease in Accounts Payable -10775 Less Decrease in Salaries Payable -4900 Net Cash Provided by Operating Activities 756735

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