Question

es $ 160,000 Accounts receivable increase $ 10,000 Expenses: Inventory decrease 16,000 Cost of goods sold 100,000 Salaries payable increase 1,000 Salaries expense 24,000 Depreciation expense 12,000 Net income $ 24,000 Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Statement of Cash Flows

Cash from operating activities

Net Income $24,000

Adjustments to reconcile net income with

net cash flow from operating activities:

Depreciation 12,000

Increase in accounts receivable (10,000)

Decrease in inventory 16,000

Salaries payable increase 1,000 $19,000

Net cash flow : Operating activities $43,000