Question

3. The following is a partial list of accounts and balances for the Schultz Company. Prepare the Operating Activities section of the Statement of Cash Flows for 2019 using the Indirect Method. 10,000-400 1,400-7A 2.800-2003 Account Title Account Title Land Accounts Receivable Prepaid Rent Prepaid Insurance Equipment Accounts Payable FICA Payable Wages payable Cash Buildings Interest Payable Unearned Revenue Beg. Bal. End. Bal. Beginning Ending Balance Balance $ 24,000 $ 65,900 10,400 2,100 900 12,000 14,500 1,800 1,000 1,2006 A 500 800 8,000 7,200 94,000 112,000 2,900 800 1,400-400 2,200 - 700 5 900 1. A Additional information: Net Income for 2019 was $39,400; Depreciation Expense was $26,700; Equipment with a book value of $20,000 was sold for $18,000 cash. 11,900 400 70 0 700 700 100 NCIncome Adds Decrease in AR Decrease in prepaid Rent Increase in wages Payable 114 trese in interest payable Increase vrearned pevene Depreciation Expense Loss Sale of Equipment subtract Increua in prepoid Insurance in AP Decrease in fica Net Cashflar from operating art -6700 On Rooo -1400 1-9oo. 07770

Answer 1

Loss on sale of equipment = Book value of equipment - Sale price of equipment

= 20,000-18,000

= $2,000

Schultz Company
Cash flow from operating activities
Net income	39,400
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	26,700
Loss on sale of equipment	2,000
Changes in current operating assets and liabilities:
Decrease in accounts receivable	400
Decrease in prepaid rent	700
Increase in prepaid insurance	-1,900
Decrease in accounts payable	-400
Increase in FICA payable	200
Increase in wages payable	300
Decrease in interest payable	-700
Increase in unearned revenue	100
Net cash provided by Operating Activities	$66,800

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