Question

Staley Inc. reported the following data:

Net income	$250,800
Depreciation expense	74,900
Loss on disposal of equipment	20,700
Increase in accounts receivable	11,000
Increase in accounts payable	10,300

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Staley Inc.
Statement of Cash Flows (partial)
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$

Answer 1

Solution

Staley Inc.
Statement of Cash Flows (partial)
Cash flows from operating activities:
Net Income	$   250,800.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$     74,900.00
Loss on disposal of equipment	$     20,700.00
Changes in current operating assets and liabilities:
Increase in accounts receivable	$    (11,000.00)
Increase in accounts payable	$     10,300.00
Net cash flow from operating activities		$      345,700.00

.General notes for cash flow
Cash is increased when the Current liability increase or the Current asset Decrease.
Cash is Decreased when Current liability Decrease or Current asset Increase.
Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash