Question

points Software Distributors reports net income of $58,000. Included in that number is depreciation expense of $11,500 and a loss on the sale of land of $5,300. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $28.000, a decrease in inventory of $16,500, and an increase in accounts payable of $48,000. Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.) SOFTWARE DISTRIBUTORS Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flows from operating activities: References Net cash flows from operating activities

Answer 1

SOFTWARE DISTRIBUTORS Statement of cash flows (Partial) Cash flows from operating activities: Net income $ 58,000 Adjustments to reconcile net income 1 to net cash flows from operating activities Depreciation expense $ 11,500 Loss on sale of land $ 5,300 Changes in current assets and current liabilities: Decrease in accounts receivable $ 28,000 Decrease in inventory $ 16,500 Increase in accounts payable $ 48,000 Net cash flows from operating activities $ 167, 300