Question

Net Income for A company is $100,000. The company had

$14,000 in depreciation expense,

a loss on the sale of Equipment of $1,000,

an increase in accounts payable of $7,000,

a decrease in accounts receivable of $5,000,

an increase in inventory of $6,000, and

a decrease in unearned revenue of $2,000.

Fill out the Cash Flow Statement below. Note that $XX represents an addition an ($XX) represents a subtraction.

A Company
Cash Flow Statement
Cash Flow from Operating Activities
Net Income	[ Select ]                       ["($100,000)", "$100,000"]
Depreciation Expense	[ Select ]                       ["$14,000", "($14,000)"]
Gain/Loss on Sale of Assets	[ Select ]                       ["$1,000", "($1,000)"]
Increase in Accounts Payable	[ Select ]                       ["($7,000)", "$7,000"]
Decrease in Unearned Revenue	[ Select ]                       ["$2,000", "($2,000)"]
Decrease in Accounts Receivable	[ Select ]                       ["($5,000)", "$5,000"]
Increase in Inventory	[ Select ]                       ["$6,000", "($6,000)"]
Net Increase/Decrease from Operating Activities	[ Select ]                       ["$119,000", "$96,000", "$91,000", "$111,000", "$89,000"]

Answer 1

Answer

A Company
Cash Flow Statement
Cash Flow from Operating Activities
Net Income	$100,000
Depreciation Expense	$14,000
Gain/Loss on Sale of Assets	$1,000
Increase in Accounts Payable	$7,000
Decrease in Unearned Revenue	($2,000)
Decrease in Accounts Receivable	$5,000
Increase in Inventory	($6,000)
Net Increase/Decrease from Operating Activities	$119,000

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No.	Conceptual Notes
1	Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2	Effects of Non - Cash Transaction are adjusted from Net Income.
3	Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4	Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5	Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income