Shim Company presents its statement of cash flows using the indirect method. The

Question

Shim Company presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Shim's 2017 and 2016 year-end balance sheets Account Title Accounts receivable Prepaid rent Interest receivable Accounts payable Salaries payable Unearned revenue 2017 2016 $31,147 $37,376 1,050 486 10,082 12,098 3,531 3,963 1,200 608 3,090 2,972 The income statement reported a $1,410 gain on the sale of equipment, an $700 loss on the sale of land, and $3,100 of depreciation expense. Net income for the period was $50,570 Required Prepare the operating activities section of the statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities Plus: Less: Net cash flow from operating activities

Explanation / Answer

CASH FLOWS FROM OPERATING ACTIVITIES: Net income 50570 Plus: Depreciation expense 3100 Loss on sale of Land 700 Decrease in accounts receivable 6229 Less: Gain on sale of equipment -1410 Increase in prepaid rent -150 Increase in interest receivable -122 Decrease in accounts payable -2016 Decrease in salaries payable -441 Decrease in unearned revenue -991 NET CASH FLOWS FROM OPERATING ACTIVITIES 55469

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