Question

Cash Flows from Operating Activities—Indirect Method Selected data (in thousands) derived from the income statement and balance sheet of National Beverage Corp. for a recent year are as follows: Income statement data: Net income $49,311 Gain on disposal of property 1,188 Depreciation expense 11,580 Other items involving noncash expenses 1,383 Balance sheet data: Increase in accounts receivable 1,746 Decrease in inventory 990 Increase in prepaid expenses 605 Decrease in accounts payable 710 Decrease in accrued and other current liabilities 995 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method for National Beverage Corp. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Enter the amounts in thousands of dollars, as shown above. National Beverage Co. Cash Flows from Operating Activities (in thousands) Cash flows from operating activities:

Answer 1

Answer:

The cash flows from operating activities section of the statement of cash flows, using the indirect method for National Beverage Corp. is $58,020.

Explanation:

National Beverage Corp.

Statement of cash flows (extract)

Net income                                                                           $49,311

Less: Gain on disposal of property                                        (1,188)

         Increase in accounts receivable                                  (1,746)

         Increase in prepaid expenses                                       (605)

         Decrease in accounts payable                                       (710)

         Decrease in accrued and other current liabilities        (995)

Add: Depreciation expense                                                   11,580

        Other items involving noncash expenses                     1,383

        Decrease in inventory                                                       990

Net cash flows from operating activities                        $58,020

Please note that a decrease in an asset means a cash inflow and vice versa while a decrease in liabilities means a cash outflow and vice versa.