Villa Company reported net income of $195,000 for 2007. Villaalso reported depre

Question

Villa Company reported net income of $195,000 for 2007. Villaalso reported depreciation expense of $45,000 and a loss of $5,000on the sale of equipment. The comparative balance sheet shows adecrease in accounts receivable of $15,000 for the year, a $17,000increase in accounts payable, and a $4,000 decrease in prepaidexpenses.

Complete the operating activities section of the statement ofcash flows for 2007. Use the indirect method. (If theamount reduces cash flow enter the number with a - sign precedingthe number ie: -14,500 .)

$

Explanation / Answer

Cash flows fromoperating activities Net Income 195,000.00 Add : Depreciation Expense 45,000.00 Loss on sale of equipment 5,000.00 Decrease in Accounts Receivable 15,000.00 Decrease in prepaid Expenses 4,000.00 Increase in Acounts Payable 17,000.00 Cash flows from operatingactivities 281,000.00

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