Krauss Company’s income statement for the year ended December 31, 2017, containe
ID: 2531415 • Letter: K
Question
Krauss Company’s income statement for the year ended December 31, 2017, contained the following condensed information.
$840,000
$624,000
60,000
26,000
710,000
130,000
40,000
$90,000
Krauss’s balance sheet contained the following comparative data at December 31.
2017
2016
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
$840,000
Operating expenses (excluding depreciation)$624,000
Depreciation expense60,000
Loss on sale of equipment26,000
710,000
Income before income taxes130,000
Income tax expense40,000
Net income$90,000
Explanation / Answer
The correct answer is :
Note :
1. Changes in Working Capital:
cash Flow From Operating Activities Net Income 90,000 Adjustment to reconcile net income to net cash provided by operating activities Depreciation Expenses 60,000 Loss on Sale of Equipment 26,000 Decrease in Accounts Receivables 17,000 Increase in Accounts Payables 10,000 Decrease in Income tax Payable - 4,500 Net cash Provided by Operating Activities 198,500Related Questions
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