Cash Flow from Operating Activities (Indirect Method) The Arcadia Company owns n

Question

Cash Flow from Operating Activities (Indirect Method) The Arcadia Company owns no plant assets and had the following income statement for the year Sales revenue Cost of goods sold $871,000 Wages expense 273,000 Rent Utilities expense 19500 1,218,100 Net income $1,235,000 16,900 Additional information about the company includes End of Beginning of Accounts receivable $83,200$76,700 Inventory78,000 111,300 Prepaid rent Accounts payable 28,600 36,400 Wages peyable 11,00 10,400 9,100 7,800 Use the preceding information to calculate the cash flow from operating activities using the indirect method Remember to use negative signs with your answers when appropriate. Cash Flow from Operating Activities Net Income Add (deduct) items to conve?net income to cash basis Accounts Recevable 5 6 8 9

Explanation / Answer

Cash Flow from Operating Activities Net Income $16,900 Add (Deduct) item to Convert Net income to cash Basis Increase in Account Receivable -$6,500 Decrease in Inventory $33,800 Increase in Prepaid Rent -$1,300 Decrease in Account Payable -$7,800 Increase Wages Payable $3,900 $22,100 Cash Flow from Operating Activities $39,000

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