Question

The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 $2,008,000 983,920 1,024,080 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $275,096 48,192 54,216 Depreciation expense Rent expense Amortization expenses-Patents Utilities expense 6,024 22,088 405,616 618,464 Gain on sale of equipment 8,032 $ 626,496 Net income $8,100 decrease 2,650 decrease Accounts payable Accounts receivable $40, 300 increase 25,275 increase Salaries payable Inventory Prepare the operating activities section of the statement of cash flows using the indirect method. (Amoun 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 Income statement items not affecting cash 3 of 6 < Prev Next > ...

Answer 1

Statement of Cash Flows (Partial) – Indirect Method
Cash flow from Operating Activities
Net Income	6,26,496
Adjustments to reconcile net income to net cash provided by operating activities
Add: Depreciation Expenses	48,192
Add: Amortization Expenses - Patents	6,024
Less: Gain on sale of Equipment	-8,032
Changes in current operating assets and liabilities
Less: Increase in accounts receivables	-40,300
Less: Increase in Inventory	-25,275
Less: Decrease in accounts payable	-8,100
Less: Decrease in salaries payable	-2,650
Net cash provided by operating activities	5,96,355