Question

Determining Cash Flows from (Used for) Operating Activities

Yeoman Inc. reported the following data:
Net income $389,200
Depreciation expense 62,600
Loss on disposal of equipment 28,400
Increase in accounts receivable 25,900
Increase in accounts payable 11,900
Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Answer 1

To calculate the Cash Flows from Operating Activities for Yeoman Inc. using the indirect method, start with the net income, adjust for non-cash expenses and changes in working capital, resulting in total cash flow from operations of $466,200.

Step-by-step explanation:

Calculating Cash Flows from Operating Activities Using the Indirect Method

To prepare the Cash Flows from Operating Activities section using the indirect method for Yeoman Inc., we start with the net income and adjust it for non-cash expenses and changes in working capital. Here's the calculation based on the provided data:

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The total cash flows from operating activities would therefore be calculated as:

$389,200 (net income) + $62,600 (depreciation expense) + $28,400 (loss on disposal) - $25,900 (increase in accounts receivable) + $11,900 (increase in accounts payable) = $466,200.

This amount, $466,200, represents the cash flows provided by operating activities for Yeoman Inc. for the period.