Question

Salud Company reports the following information.

Selected Annual Income Statement Data				Selected Year-End Balance Sheet Data
Net income	$	495,000		Accounts receivable increase	$	43,200
Depreciation expense		94,000		Prepaid expenses decrease		16,200
Gain on sale of machinery		26,900		Accounts payable increase		7,600
				Wages payable decrease		3,600

Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer: Cash flows from Operating activities (Indirect method). Net income - = $495,000 $ 94,000 Addo Depreciation lesso Gain on sale - $ of machinery 26,900 1 Operating profit before working capital changes > $562,100 Add: Accounts receivable increase Wages payable decrease $ 43,200 $ 3,600 lossos prepaid expenses decrease 1-$ 16,200 Accounts payable increase - $ 7,600 $ 585,100 Cash flow from operating activity = $585,100