The following income statement and information about changes in noncash current

Question

The following income statement and information about changes in noncash current assets and current liabilities are reported. SONAD COMPANY Income Statement For Year Ended December 31, 2015 Sales $ 2,417,000 Cost of goods sold 1,184,330 Gross profit 1,232,670 Operating expenses Salaries expense $ 331,129 Depreciation expense 58,008 Rent expense 65,259 Amortization expenses—Patents 7,251 Utilities expense 26,587 488,234 744,436 Gain on sale of equipment 9,668 Net income $ 754,104 Changes in current asset and current liability accounts for the year that relate to operations follow. Accounts receivable $ 20,450 increase Accounts payable $ 14,050 decrease Inventory 32,325 increase Salaries payable 5,100 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.)

Explanation / Answer

Cash Flows from Operating Activities Net Income $754,104 Add Non Cash Expenses     Depreciation 58008     Amortization Expense 7251 Less; Non Operation Income     Gain on Sale of Equip -9668 Other Adjustments:     Less Increase in Accounts Receivable -20450     Less Decrease in Accounts Payable -14050     Less Increase in Inventory -32325     Less Decrease in Salary Payable -5100 Net Cash from Operating Activities $737,770

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