Tamarisk Corporation had the following 2017 income statement. $183,000 118,000 6

Question

Tamarisk Corporation had the following 2017 income statement.

$183,000

118,000

65,000

45,000

$20,000

The following accounts increased during 2017: Accounts Receivable $13,000, Inventory $11,000, Accounts Payable $13,000. Prepare the cash flows from operating activities section of Tamarisk’s 2017 statement of cash flows using the indirect method.

Sales revenue

$183,000

Cost of goods sold

118,000

Gross profit

65,000

Operating expenses (includes depreciation of $19,000)

45,000

Net income

$20,000

Tamarisk Corporation Statement of Cash Flows-Indirect Method (Partial) December 31, 2017 Cash Flows from Operating Activitles Net Income Adjustments to reconcile net income to

Explanation / Answer

Cash flows from operating activities Particulars Amount $ Amount $ Net Income       20,000 Non cash Non operating Items Add: Depreciation        19,000       19,000 Decrease in current assets and increase in current liabilities Increase in accounts payable        13,000       13,000 Less: Increase in current assets and decrease in current liabilities Increase in accounts receivable     (13,000) Increase in Inventory     (11,000)     (24,000) Net cash provided by operating activities       28,000

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