Question

The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 Sales $ 1,858,000 Cost of goods sold 910,420 Gross profit 947,580 Operating expenses Salaries expense $ 254,546 Depreciation expense 44,592 Rent expense 50,166 Amortization expenses—Patents 5,574 Utilities expense 20,438 375,316 572,264 Gain on sale of equipment 7,432 Net income $ 579,696 Accounts receivable $ 18,800 increase Accounts payable $ 10,900 decrease Inventory 20,200 increase Salaries payable 3,550 decrease

Answer 1

Answer:

Statement of Cash Flows (partial)  

Cash flows from operating activities  

Net income 579,696

Adjustments to reconcile net income to net cash provided by operating activities  

Income statement items not affecting cash  

Depreciation expense 44,592

Amortization expense—Patents 5,574

Gain on sale of equipment -7,432

Changes in current operating assets and liabilities  

Increase in accounts receivable -47,700

Increase in inventory -15,650

Decrease in accounts payable -13,550

Decrease in salaries payable -3,500

Net cash provided by operating activities 5,42,030