![Exercise 4-18 (Algo) Statement of cash flows; indirect method [LO4-8] Chew Corporation prepares its statement of cash flows u](http://img.homeworklib.com/questions/cf9313c0-17f3-11ea-abd2-1dd95403932d.png?x-oss-process=image/resize,w_560)
Homework Answers
Please fill up the amount from the data given to you if any of the item do not match due to the blurry image in the question.
Solution
| Cash Flow from Operating Activities: | |
| Net Income | $ 1,255,000.00 |
| Add: Adjustments for non cash effect: | |
| Depreciation expense | $ 145,000.00 |
| Changes in operating assets and liabilities: | |
| Increase in Accounts receivables | $ (157,000.00) |
| Decrease in Inventory | $ 113,000.00 |
| Decrease in prepaid expenses | $ 67,000.00 |
| Decrease in salary payable | $ (25,000.00) |
| Increase in income tax payable | $ 49,000.00 |
| A. Cash Flow from Operating Activities | $ 1,447,000.00 |
.
General notes for cash flow
Cash is increased when Current liability increase or Current asset
Decrease.
Cash is Decreased when Current liability Decrease or Current asset
Increase.
Depreciation or loss on sale of any asset is a non cash expense
hence it will be added to net income to get operating cash
Profit on sale of asset or investment is a non cash profit and
hence will be deducted from operating income.
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Exercise 4-18 (Algo) Statement of cash flows; indirect method [LO4-8] Chew Corporation prepares its statement of ca...
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