Net Cash Flow From Operating Activities Verna Company\'s records provided the fo

Question

Net Cash Flow From Operating Activities

Verna Company's records provided the following information for 2016:

Decrease in accounts payable, $4,600

Loss on sale of land, $1,900

Increase in inventory, $7,800

Increase in income taxes payable, $2,700

Net income, $68,400

Patent amortization expense, $1,600

Ordinary loss, $6,200

Decrease in deferred taxes payable, $2,500

Amortization of discount on bonds payable, $1,300

Payment of cash dividends, $24,000

Depletion expense, $5,000

Decrease in salaries payable, $1,400

Decrease in accounts receivable, $3,500

Gain on sale of equipment, $6,100

Proceeds from issuance of stock, $57,000

Ordinary gain, $3,700

Depreciation expense, $10,000

Amortization of discount on investment in bonds, $1,500

Required

Prepare the operating activities section of Verna's 2016 statement of cash flows using the indirect method. Use a minus sign to indicate cash outflows or decreases in cash.

VERNA COMPANY Statement of Cash Flows (Partial) For Year Ended December 31, 2016 Operating Activities: $ Adjustment for noncash income items: Adjustments for cash flow effects
from working capital items: $

Explanation / Answer

VERNA COMPANY Cash flow from operating activities for the year 2016 Net income 68400 Adjustment for non-cash items     Loss on sale of land 1900     Patent amortization expense 1600     Depletion Expense 5000     Gain on sale of equipment -6100     Depreciation expense 10000 Net adjustment for non-cash items 12400 Adjustment for changres in working capital    Decrease in accounts payable -4600     Increase in inventory -7800     Increase in income teaxes payable 2700     Decrease in deferred taxes payable -2500     Decrease in salaries payable -1400     Decrease in accounts receivable 3500 Net adjustment for changes in working capital -10100 Net cash flow from (used in) operating activities 70700

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