Question

Software Distributors reports net income of $53,000. Included in that number is depreciation expense of $9,000 and a loss on the sale of land of $4,800. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $23,000, a decrease in inventory of $14,000, and an increase in accounts payable of $43,000. Required Prepare the operating activities section of the statement of cash flows using the indirect method.

Answer 1

Answer and Explanation:

Cash flows (Indirect method) from Operating Activities.

Particular Amount

Net Income $53,000

Adjustment:

Add: Depreciation expense $9,000

Loss on sale of land $4,800

Decrease in A/c receivables $23,000

Decrease in Inventory $14,000

Increase in A/c payable $43,000

Net Cash flows from Operating activities $146,800