1. Net income for Malamud Greeting Card Company was $79,500, depreciation expens

Question

1.            Net income for Malamud Greeting Card Company was $79,500, depreciation expense was $21,430, and there was a loss on the sale of investments of $5,800. Relevant accounts from the balance sheet for December 31, 19x2 and 10x1 are as follows:

   19x2                            10x1

                        Accounts Receivable (net)                                     $18,530                      $23,670

                        Inventory                                                                   39,640                      34,990

                        Prepaid Expenses                                                       2,400                          8,900

                        Accounts Payable                                                   34,940                      22,700

                        Accrued Liabilities                                                       4,690                          8,830

                        Income Taxes Payable                                               4,750                      17,600

            Using the indirect method, prepare a schedule of cash flows from operating activities.

Explanation / Answer

Hi,

Please find the answer as follows;

Thanks.

Net Income 79500 Add Depreciation 21430 Decrease in Accounts Receivable 5140 Decrease in Prepaid Expenses 6500 Increase in Accounts Payables 12240 Less Increase in Inventory -4650 Decrease in Accrued Liabilities -4140 Decrease in Income Taxes Payable -12850 Cash flows from operating activities 103170

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