Question

The following income statement along with additional year-end information about changes in noncash current assets and current liabilities are reported. SONAD COMPANY Income Statement For Year Ended December 31 Sales $ 2,215,000 Cost of goods sold 1,085,350 Gross profit 1,129,650 Operating expenses Salaries expense $ 303,455 Depreciation expense 53,160 Rent expense 59,805 Amortization expense–Patents 6,645 Utilities expense 24,365 447,430 682,220 Gain on sale of equipment 8,860 Net income $ 691,080 Additional Year-End Balance Sheet Data Accounts receivable $ 12,950 increase Inventory 23,600 increase Accounts payable 9,075 decrease Salaries payable 4,750 decrease Required: Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect metho

Answer 1

$691,650

Step-by-step explanation:

Cash flows from operating activities section of the statement of cash flows using the indirect method

Net income $ 691,080

Less Gain on sale of equipment (8,860)

Add Depreciation expense 53,160

Add Amortization expense–Patents 6,645

$742,025

Changes in working capital

Less Increase in Accounts receivable $ (12,950)

Less Increase in Inventory (23,600 )

Less Decrease in Accounts payable (9,075)

Less Decrease in Salaries payable (4,750)

Cash flow from operating activities $691,650