The following income statement and information about changes in noncash current
ID: 2569337 • Letter: T
Question
The following income statement and information about changes in noncash current assets and current liabilities are reported.
Changes in current asset and current liability accounts for the year that relate to operations follow.
Required:
Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Income Statement
For Year Ended December 31, 2017 Sales $ 1,858,000 Cost of goods sold 910,420 Gross profit 947,580 Operating expenses Salaries expense $ 254,546 Depreciation expense 44,592 Rent expense 50,166 Amortization expenses–Patents 5,574 Utilities expense 20,438 375,316 572,264 Gain on sale of equipment 7,432 Net income $ 579,696
Explanation / Answer
Statement of Cash Flows (partial) Cash flows from operating activities Net income 579696 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 44,592 Amortization expense—Patents 5,574 Gain on sale of equipment -7,432 Changes in current operating assets and liabilities Increase in accounts receivable -47,700 Increase in inventory -15,650 Decrease in accounts payable -13,550 Decrease in salaries payable -3,500 Net cash provided by operating activities 5,42,030
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