The accounting records of EZ Company provided the data below Net income Deprecia

Question

The accounting records of EZ Company provided the data below Net income Depreciation expense Increase in inventory Decrease in salaries payable Decrease in accounts receivable Amortization of patent Amortization of premium on bonds Increase in accounts payable Cash dividends $52,850 8,350 2,175 1,355 2,900 605 2,185 5,350 13,500 Prepare a reconciliation of net income to net cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities Adjustments for noncash effects Changes in operating assets and liabilities. Net cash flows from operating activities

Explanation / Answer

Note:cash Dividend amounts are covered under Cashflow from Financing Activities,Hence need not to include operating activities

Cash Flow from Operating Activities Net Income 52850 $ Adjustements for non cash effects Add: Depreciation Expenses 8350 Amortization of Patent 605 Amortization of premium on bonds 2185 11140 11140 $ Changes in Operating assets and Liabilities Add: Increase in accounts Payable 5350 Decrese in Accounts Receivable 2900 8250 Less: Increase in Inventory 2175 Decrese in Salaries Payable 1355 3530 4720 $ Net cashflow from Operating activities 68710 $

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