Question

Salud Company reports the following information. Selected Annual Income Statement Selected Year-End Balance Sheet Data Data Net income $475,000 Accounts receivable increase 90,000 Prepaid expenses decrease 21,500 Accounts payable increase Wages payable decrease $53,600 Depreciation expense Gain on sale of machinery 14,700 6,600 2,200 Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activites Adjustments to reconcile net income to operating cash flow

Answer 1

Cash flows from operating activities
Net income		475,000
Adjustment to reconcile net income to operating cash flow
Depreciation expense	90,000
Gain on sale of machienery	-21,500
Accounts receivable increase	-53,600
Prepaid expenses decrease	14,700
Accounts payable increase	6,600
Wages payable decrease	-2,200	34,000
Net cash provided from operating activities		509,000