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1.76 points Software Distributors reports net income of 500.000. Included in net income is a gain on the sale of land of $5,0
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Ans. SOFTWARE    DISTRIBUTORS
Statement of Cash Flows (partial)
Particulars Amount Amount
Cash flow from operating activities:
Net income $60,000
Adjustments to reconcile Net income to Net cash
provided by Operating Activities:
Less: Gain on sale of land -$5,500
Add: Decrease in accounts receivable -$30,000
Less: Increase in inventory -$17,500
Less: Decrease in accounts payable -$50,000
-$103,000
Net cash (Used for) Operating Activities -$43,000
*Explanations:
*Increase in current liabilities and Decrease in current assets other than cash is added to Net Income.
*Non cash & Non operating expenses are added to Net income.
*Non cash & Non operating income are deducted from Net income.
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