Question

Skysong, Inc. reported net income of $194,500 for 2020. Skysong also reported depreciation expense of $47,500 and a loss of $6,200 on the disposal of plant assets. The comparative balance sheet shows a decrease in accounts receivable of $18,200 for the year, a $20,200 increase in accounts payable, and a $5,000 decrease in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2020. Use the indirect method.

Answer 1

Net cashflow from operating activities =$271,400

Step-by-step explanation:

The cash flow statement is a financial statement that provides information about the sources and the usage of cash during a particular accounting period usually a year.

It provides the cash inflow and outflows under three (3 ) categories of activities operating investing, financing.

The net operating activities section of the cash flow is prepared below:

$

Net income 194,500

Add Depreciation expense 47,500

Add Loss on disposal 6,200

Add Decrease in account receivable 18,200

Add Increase in accounts payable 5,000

Net cashflow from operating activities 271,400