Salud Company reports the following information. Use the indirect method to prep

Question

Salud Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2017 (Amounts to be deducted should be indicated with a minus sign.) Selected 2017 Income Statement Data Net income Depreciation expense Gain on sale of machinery $500,000 Accounts receivable increase 86,000 Prepaid expenses decrease 20,000 Accounts payable increase Selected Year-End 2017 Balance Sheet Data $51,200 15,300 6,800 2,300 Wages payable decrease Cash flows from operating activities et income $485,000 Adjustments to reconcile net income to operating cash flow $ 485,000

Explanation / Answer

Cash flow from operating activities :

Cash flow from operating activities Net income 500000 Adjustment to reconcile net income to operating cash flow Depreciation expense 86000 Gain on sale of machinery -20000 Increase account receivable -51200 Decrease prepaid expense 15300 Increase account payable 6800 Decrease wages payable -2300 34600 Net Cash flow from operating activities 534600

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