Question

The accounting records of Eastlake Industries provided the data below. Net income $ 300,000 Depreciation expense 15,000 Increase in inventory 2,000 Increase in accounts receivable 1,400 Decrease in interest payable 1,600 Amortization of bond premium 3,000 Increase in accounts payable 7,000 Cash dividends paid 20,000 Required: Prepare a reconciliation of net income to net cash flows from operating activities.

Answer 1

Answer:

Explanation:

Net income $300,000

Adjustments for noncash effects:

Depreciation expense 15,000

Increase in inventory (2,000)

Decrease in interest payable (1,600)

Increase in accounts receivable ( 1,400)

Decrease in bond premium (3,000)

Increase in accounts payable 7,000

Net cash flows from operating activities

$314,000