Question

The following information is available for XYZ Company:

                        January 1, 2022       December 31, 2022

ASSETS
  Cash                        $31,000               $20,000
  Accounts receivable          74,000                80,000
  Supplies                     10,000                 7,000
  Land                         50,000                40,000
  Equipment                    20,000                36,000
  Accumulated depreciation      6,000                 8,000
  Patent                            0                 6,000

LIABILITIES + EQUITY
  Accounts payable            $15,000               $19,000
  Short-term notes payable     22,000                13,000
  Salaries payable             17,000                 1,000
  Common stock                 40,000                50,000
  Retained earnings            85,000                98,000

During 2022, XYZ Company paid dividends of $12,000, recorded depreciation expense
of $2,000, and sold land costing $17,000 for $10,000 cash.

Using the indirect method, calculate the net cash flow from operating activities
for 2022. If your answer is negative, place a minus sign in front of your answer
with no spaces in between (e.g., -1234).

Answer 1

Net cash flow from operating activities= $19,000

Working

XYZ COMPANY
Statement of Cash Flows (Partial)
For year Ended december 31 2022
A. Cash Flows from Operating Activity
Net Income		$       25,000.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$         2,000.00
Loss on sale of Land	$         7,000.00
Changes in current operating assets and liabilities:
Increase in accounts receivable	$      (6,000.00)
Decrease in supplies	$         3,000.00
Increase in accounts payable	$         4,000.00
Decrease in salaries payable	$    (16,000.00)
		$       (6,000.00)
Net cash flow from Operating activities		$       19,000.00

.

Calculation of Net income
Beginning balance of retained earnings	$ 85,000
Less: Dividends	$ 12,000
	$ 73,000
Less: Ending balance of Retained earnings	$ 98,000
Net income	$ 25,000