Computation of Net Cash Flows from Operating Activities—Indirect Method
The following data are taken from the income statement and balance sheet of Freeman Machinery, Inc.:
| Dec. 31, 2015 | Jan. 1, 2015 |
Income statement: | ||
Net Income | $385,000 |
|
Depreciation Expense | 135,000 |
|
Amortization of Intangible Assets | 40,000 |
|
Gain on Sale of Plant Assets | 90,000 |
|
Loss on Sale of Investments | 35,000 |
|
Balance sheet: |
|
|
Accounts Receivable | $335,000 | $380,000 |
Inventory | 503,000 | 575,000 |
Prepaid Expenses | 22,000 | 13,000 |
Accounts Payable (to merchandise suppliers) | 379,000 | 410,000 |
Accrued Expenses Payable | 180,000 | 155,000 |
Using this information, prepare a partial statement of cash flows for the year ended December 31, 2015, showing the computation of net cash flows from operating activities by the indirect method.
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