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 Selected Year-End 2017 Balance Sheet Data Net income $ 440,000 Accounts receivable increase $ 47,600 Depreciation expense 84,500 Prepaid expenses decrease 16,800 Gain on sale of machinery 25,100 Accounts payable increase 6,200 Wages payable decrease 2,900

Explanation / Answer

Cash flows from operating activities Paticulars Amt Net Income 440000 Add: Depreciation 84500 Less: Gain on sale of machinery 25100 Cash flow before change in working capitals 499400 Less: increase in account receivable 47600 Less: decrease in wages payable 2900 Add: decrease in Prepaid expenses 16800 Add: increase in Accounts payable 6200 Cash flow from operating activities 471900

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