Question

105 (Exercise S10-6 is an alternative exercise.) Edwards Comoration Inc. accountants have LEARNING OBIECTIVE assembled the following data for the year ended June 30, 2017: Compute operating cash flows- indirect method 6.000 purchase of ing expenses 35,000 40,000 20.000 Payment of dividends. Proceeds from issuance of common shares ... 20,000 Sales revenue.................. 224,000 Increase in operating current assets other than cash. 30,000 Repurchase of common shares.......... 5,000 Cost of goods sold ............................ $100,000 Other operating expenses Purchase of equipment......... Decrease in operating current liabilities................................. Payment of note payable ................... Proceeds from sale of land .............. Depreciation expense ................... 5,000 30,000 60,000 8,000 Prepare the operating activities section of Edwards's statement of cash flows for the year ended June 30, 2017. Edwards uses the indirect method for operating cash flows.

Answer 1

Calculation of Net income
Sales revenue	224,000
Cost of goods sold	-100,000
Gross profit	124,000
Other operating expense	-35,000
Depreciation expense	-8,000
Net Income	$81,000

Edwards Corporation Inc.
Partial Statement of Cash Flows
For the Year Ended June 30, 2017
Particulars	$	$
I.                   Cash flow from Operating Activities
Net income	81,000
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation on fixed assets	8,000
Changes in current operating assets and liabilities:
Increase in current assets other than cash	-30,000
Decrease in opearing current liabilities	-5,000
Net cash provided by Operating Activities		$54,000

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