Exercise 12-4 Indirect: Cash flows from operating activities LO P2 The following

Question

Exercise 12-4 Indirect: Cash flows from operating activities LO P2 The following income statement and information about changes in noncash current assets and current labilities are reported. Incone Statement Sales Cost of goods sold Gross profit 1,543,000 756,070 786,930 Salaries expense Rent expense Amortization expenses-Patents Utilities expense $211,391 37,032 41,661 4,629 16,973 311,686 475,244 6,172 Gain on sale o quipment Net income 481,416 Changes in current asset and current liablity accounts for the year that relate to operations follo Aecounts receivable Inventory $31,850 increase Accounts payable 28,025 increase Salaries payable $12,900 decrease 3,800 decrease Required 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.) Statement of Cash Flows (partial) Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities income statement items not affecting cash MacBook Air FI F2 F3

Explanation / Answer

Answer, as asked:

Cash flows from Operating Activities Net Income $       4,81,416.00 Adjustments to……………operating activities Income Statement items not affecting Cash Depreciation expense $          37,032.00 Amortisaction expense patents $             4,629.00 Gain on Sale of Equipment $          (6,172.00) Changes in Current operating Assets & Liabilities Increase in A/R $        (31,850.00) Decrease in A/P $        (12,900.00) Increase in Inventory $        (28,025.00) Decrease in Salaries payable $          (3,800.00) Net Cash Flows provided by Operating Activities $       4,40,330.00

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