Question

Cash Flows from Operating Activities—Indirect Method

Staley Inc. reported the following data:

Net income	$408,300
Depreciation expense	62,300
Loss on disposal of equipment	20,100
Increase in accounts receivable	28,700
Increase in accounts payable	11,800

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

Staley Inc.
Statement of Cash Flows (partial)
Cash flows from operating activities:	$	$
Net Income		408,300
Adjustments to reconcile net income to net cash flow from operating activities:
Add: Depreciation	62,300
Add: Loss on disposal of equipment	20,100	490,700
Changes in current operating assets and liabilities:
Less: Increase in accounts receivable	-28,700
Add: Increase in accounts payable	11,800	473,800
Net cash flow from operating activities		473,800