Problem

Use the indirect method to determine cash flows from operating activitiesHong Company pres...

Use the indirect method to determine cash flows from operating activities

Hong Company presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Hong's 2012 and 2011 year-end balance sheets:

Account Title

2012

2011

Accounts receivable

$46,000

$38,000

Prepaid rent

2,400

2,800

Interest receivable

900

1,000

Accounts payable

10,500

9,000

Salaries payable

4,200

4,800

Unearned revenue

5,000

4,500

The income statement contained a $500 loss on the sale of equipment, a $700 gain on the sale of land, and $3,200 of depreciation expense. Net income for the period was $47,000.

Required

Prepare the operating activities section of the statement of cash flows.

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