Question

Question 7 Flint Company's income statement for the year ended December 31, 2017, contained the following condensed information. Service revenue Operating expenses (excluding depreciation) $630,000 Depreciation expense Loss on sale of equipment Income before income taxes Income tax expense Net income $846,000 61,000 27,000 718,000 128,000 40,000 $88,000 Flint's balance sheet contained the following comparative data at December 31. 2017 2016 Accounts receivable Accounts payable Income taxes payable 35,000 42,000 3,900 $57,000 30,000 8,700 Accounts payable pertains to operating expenses.)

Answer 1

	Flint Company
	Statement of Cash Flow (Partial)
	For the year ended December 31, 2017
	Cash flows from operating activities
	Cash receipts from customers		$   8,68,000
	Cash Payments:
	For operating expenses	$ 6,18,000
	For Income taxes	$      44,800
			$   6,62,800
	Net cash provided by operating activities		$   2,05,200
	Workings:
	Cash receipts from customers
	Service revenue	=	$   8,46,000
Add:	Decrease in accounts receivables ($57000 - $35000)	=	$      22,000
	Cash receipts from customers	=	$   8,68,000
	Cash Payments:
	For operating expenses
	Operating expense as per income statement	=	$   6,30,000
Less:	Increase in accounts payable ($42000 - $30000)	=	$      12,000
	For operating expenses	=	$   6,18,000
	For Income taxes
	Income taxes as per income statement	=	$      40,000
Add:	Decrease in Income tax payable ($8700 - $3900)	=	$         4,800
	For Income taxes	=	$      44,800