Question

4)The accounting records of rockiness company provided the data below（$ in 000s）

Net income                       $25,200

Depreciation expense                 3,300

Decrease in accounts receivable        2,000

Increase in inventory                  4,500

Increase in prepaid insurance            300

Increase in salaries payable              900

Decrease in interest payable             400

Required: Statement of Cash Flow reconciliation of net income to net cash flows from operating activities

Answer 1

Cash Flows from operating activities
Net income	25,200
Adjustments
Depreciation expense	3,300
Changes in operating assets and liabilities
Decrease in accounts receivable	2000
Increase in inventory	(4,500)
Increase in prepaid insurance	(300)
Increase in salaries payable	900
Decrease in interest payable	(400)

Net cash provided by operating activities = 26,200