Question

Fitz Company reports the following information.

Selected Annual Income Statement Data Selected Year-End Balance Sheet Data

Net income $412,000 Accounts receivable decrease $33,400
Depreciation expense 50,000 Inventory decrease 47,500
Amortization expense 7,300 Prepaid expenses increase 6,200
Gain on sale of plant assets 7,400 Accounts payable decrease 10,900
Salaries payable increase 1,300

Required:
Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31.

Answer 1

Net cash from operating activities is $527,000.

Step-by-step explanation:

This can be prepared as follows:

Fitz Company

Statement of cash flows

(Operating activities section only)

For the year ended December 31.

Details $

Net income 412,000

Adjustment to reconcile net income:

Depreciation expense 50,000

Amortization expense 7,300

Gain on sale of plant assets (7,400)

(Increase) decrease in current assets:

Accounts receivable decrease 33,400

Inventory decrease 47,500

Prepaid expenses increase (6,200)

Increase (decrease) in current liabilities:

Accounts payable decrease (10,900)

Salaries payable increase 1,300

Net cash from operating activities 527,000