Left side choices: Portions of the financial statements for Software Associates

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Portions of the financial statements for Software Associates are provided below SOFTWARE ASSOCIATES Income Statement For the year ended December 31, 2015 Net sales S 620,000 Cost of goods sold Operating expenses Depreciation expense Income tax expense 5375,000 121,000 32,100 44,500 Total expenses 572,600 Net income 5 47,400 SOFTWARE ASSOCIATES Selected Balance Sheet Data December 31, 2015, compared to December 31, 2014 Decrease in inventory Increase in prepaid rent Decrease in salaries payable Increase in accounts payable Increase in income tax payable 59,100 12,100 2,100 3,100 6,100 7,100 Required: Prepare the operating activities section of the statement of cash flows for Software Associates using the direct method. (List cash outflows as negative amounts.) E ASSOCIATES Statement of Cash Flows (partial) For the Year Ended December 31, 2015 Cash Flows from Operating Activities Net cash flows from operating activities

Explanation / Answer

Software Associates Statement of Cash Flow For the year ended December 31, 2015 Cash Flow from Operating Activities Net Income 47400 Depreciation 32100 Decrease in Accounts Receivable 9100 Decrease in Inventory 12100 Increase in Accounts Payable 6100 Income Tax Payable 7100 Increase in Prepaid Rent -2100 Decrease in Salaries Payable -3100 Cash Flow from Operating Activities 108700

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