Question

GJ Company, a manufacturer, has provided the following information pertaining to its recent year of operation: Net income, $480,000 Accounts payable decreased $40,000 Prepaid assets increased $29,000 Depreciation expense was $51,000 Accounts receivable decreased $39,000 Loss on sale of a depreciable asset was $29,000 Wages payable increased $25,000 Unearned revenue decreased $29,000 Patent amortization expense was $11,000 Using the indirect method, how much was GJ's net cash provided by operating activities

Answer 1

GJ Company

Cash Flow From Operating Activity

Net Income $480,000

Add: Depreciation Expenses $51,000

Add: Patent Amortization Expenses $11,000

Increase in Current Liability and

decrease in current asset

Accounts receivable decreased $40,000

Wages Payable Increased $25,000

Unearned Revenue decreased $29,000

Decrease in Current Liability

and Increase in current asset

Prepaid asset increased ($29,000)

Accounts Payable Decreased ($40,000)

Add: Loss on sale of asset $29,000

Cash Flow From Operating Activity $596,000