Exercise 12-4 Indirect: Cash flow from operations LO P2 Salud Company reports ne
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Question
Exercise 12-4 Indirect: Cash flow from operations LO P2
Salud Company reports net income of $380,000 for the year ended December 31, 2013. It also reports $68,400 depreciation expense and a $3,500 gain on the sale of machinery. Its comparative balance sheets reveal a $30,400 increase in accounts receivable, $15,580 increase in accounts payable, $8,360 decrease in prepaid expenses, and $11,780 decrease in wages payable.
Prepare only the operating activities section of the statement of cash flows for 2013 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Salud Company reports net income of $380,000 for the year ended December 31, 2013. It also reports $68,400 depreciation expense and a $3,500 gain on the sale of machinery. Its comparative balance sheets reveal a $30,400 increase in accounts receivable, $15,580 increase in accounts payable, $8,360 decrease in prepaid expenses, and $11,780 decrease in wages payable.
Explanation / Answer
Cash flow from operating Activities Net Income from operations 380000 Add Depriciation 68400 Increase in accounts payable 15580 Decrease in prepaid expenses 8360 92340 Less Gain on sale of machinery 3500 Increase in accounts receivable 30400 Decrease in wages payable 11780 45680 Net cash flow from operating activities 426660
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