Question

Exercise 21-17 Indirect method; reconciliation of net income to net cash flows from operating activities [LO21-4] The accounting records of EZ Company provided the data below. Net income$54,750 Depreciation expense 9,250 Increase in inventory 2,625 Decrease in salaries payable 1,725 Decrease in accounts receivable 3,500 Amortization of patent 675 Amortization of premium on bonds 2,975 Increase in accounts payable 6,250 Cash dividends 14,500 Prepare a reconciliation of net income to net cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

$73,050

Explanation:

Net income                                                              $54,750

Adjustments to reconcile

Net Income to net cash

provided by Operating activities  

Depreciation expense                                              $9,250

Increase in inventory                                             -$2,625

Decrease in salaries payable                             -$1,725

Decrease in accounts receivable                              $3,500

Amortization of patent                                               $675

Amortization of premium on bonds                      $2,975

Increase in accounts payable                              $6,250

Net Cash Provided by Operating activities    $73,050