P17-5A P17 SA Zumbrunm Companys income statuoment co below. tained the condensed

Question

P17-5A

P17 SA Zumbrunm Companys income statuoment co below. tained the condensed information ZUMBRUNN COMPANY Income Statement For the Year Ended December 31, 2017 Prepare the operating activities section-indirect method LO 2) Service revenue Operating expenses, excluding depreciation Depreciation expense Loss on disposal of equipment Income before income taxes Income tax expense Net income $970,000 XLS $624.000 60,000 16,000 700,000 270,000 40,000 $230,000 Zumbrunn's balance sheet contained the comparative data at December 31, shown below. 2017 $75,000 46,000 11,000 2016 $65,000 28,000 Accounts receivable Accounts payable 7,000 Income taxes payable Accounts payable pertain to operating expenses Instructions Prepare the operating activities section of the statement of cash flows using the indirect method. Cush hom opeat 5318 Prepare the operating activities R1760 Dt for 7umbrunn Çompany are presented in P17-5A.

Explanation / Answer

the following is the calculation of operating activities section of statement of cash flows using the indirect method.

net income $230,000 items to reconcile net income to cash from operating activities depreciation expense 60,000 loss on sale of equipment 16,000 increase in accounts receivable (75,000 - 65,000) (10,000) increase in accounts payable (46,000 - 28,000) 18,000 increase in income tax payable (11,000 - 7,000) 4,000 88,000 cash flow from operations 318,000

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