Question

Cash Flows from Operating Activities—Indirect Method Staley Inc. reported the following data: Net income $280,000 Depreciation expense 48,000 Loss on disposal of equipment 19,520 Increase in accounts receivable 17,280 Increase in accounts payable 8,960 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Answer 1

Answer and Explanation:

cash flow from operating activities                                            

                                                                                                  amount

net income                                                                                $280,000

non cash expenditure:

          depreciation                                                                  $48,000

non operating gains:

   loss on disposal of equipment                                            $18,520

cash flow before working capital changes                            $347,520

working capital changes:

increase in accounts receivable                      ($17,280)

increase in accounts payable                           $8,960         ($8,320)

cash flow from operating activities                                        $339,200