Question

The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $245,535 Depreciation expense Rent expense 49,600 Amortization expenses-Patents 4,200 Utilities expense $1,828,000 991,800 837,000 44,20€ 18,125 361,660 475, 340 6.200 Gain on sale of equipment Net income $ 481, 540 Accounts receivable Inventory $30, 500 increase 25,900 increase Accounts payable salaries payable $12,500 decrease 3,508 decrease 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.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities

Answer 1

சசச Calculation of Cash Flow from Operating Activities: Net Income 481,540.00 Less: Gain on Sale of Equipment (6,200.00) Add: Depreciation Expense 44,200.00 Add: Amortization Expense 4,200.00 523,740.00 Changes in Working Capital: Less: Increase in Accounts Receivable (30,500.00) Less: Increase in Inventory (25,000.00) Less: Decrease in Accounts Payable (12,500.00) Less: Decrease in Salaries Payable (3,500.00 Cash Flow From Operating Activities $ 452,240.00 A A