The income statement disclosed the following items for the current year: Depreciation expense $36,000 Gain on disposal of equipment 21,000 Net income 317,500 Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows: Increase in accounts receivable $5,600 Decrease in inventory 3,200 Decrease in prepaid insurance 1,200 Decrease in account payable 3,800 Increase in income taxes payable 1,200 Increase in dividends payable 850 Required: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
The income statement disclosed the following items for the current year: Depreciation expense $36,000 Gain on disposal of equipment 21,000 Net income 317,500 Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows: Increase in accounts receivable $5,600 Decrease in inventory 3,200 Decrease in prepaid insurance 1,200 Decrease in account payable 3,800 Increase in income taxes payable 1,200 Increase in dividends payable 850 Required: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 3BE
Related questions
Question
The income statement disclosed the following items for the current year:
|
$36,000
|
|
| Gain on disposal of equipment |
21,000
|
| Net income |
317,500
|
Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows:
| Increase in accounts receivable |
$5,600
|
| Decrease in inventory |
3,200
|
| Decrease in prepaid insurance |
1,200
|
| Decrease in account payable |
3,800
|
| Increase in income taxes payable |
1,200
|
| Increase in dividends payable |
850
|
Required:
Prepare the
| Operating Activities Section |
Transcribed Image Text:Cash flows from operating activities:
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities
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