Question

Cash Flow from Operating Activities Using the information for the Seville Corporation, calculate the ca Accounts payable increase Accounts receivable increase Accrued liabilities decrease Amortization expense Cash balance, January 1 Cash balance, December 31 Cash paid as dividends Cash paid to purchase land Cash paid to retire bonds payable at par Cash received from issuance of common stock Cash received from sale of equipment Depreciation expense Gain on sale of equipment Inventory decrease Net income Prepaid expenses increase $10,800 4,800 3,600 6,000 22,000 15,000 29,000 90,000 60,000 35,000 17,000 29,000 4,800 15,600 91,200 2,400 Use a negative sign with answer to show cash outflow from (used b Cash flow from (or used by) operating activities: $ 0 Type here to search

Answer 1

Ans.	SEVILLE CORPORATION
	Statement of Cash Flows (partial)
	Particulars	Amount
	Cash flow from operating activities:
	Net income	$91,200
	Adjustments to reconcile net income to net cash
	flow from Operating Activities:
	Add: Depreciation expense	$29,000
	Add: Amortization expense	$6,000
	Less: Gain on sale of equipment	-$4,800
	Changes in current operating assets and liabilities:
	Less: Increase in accounts receivable	-$4,800
	Add: Increase in accounts payable	$10,800
	Less: Decrease in accrued liabilities	-$3,600
	Add: Decrease in inventory	$15,600
	Less: Increase in prepaid expenses	-$2,400
	Net cash from Operating Activities	$137,000
	*Increase in current liabilities and Decrease in current assets other than cash are added to Net Income.
	*Increase in current assets (other than cash) and Decrease in current liabilities are subtracted from Net Income.
	*Non cash & Non operating expenses are added to Net income.
	*Non cash & Non operating income are deducted from Net income.