Question

DJ Company, a manufacturer, uses the indirect method for preparing its statement of cash flows. The company has provided the following information pertaining to its recent year of operation: Cash flow from operating activities, $262,000 Accounts payable decreased $26,000 Prepaid assets increased $20,000 Depreciation expense was $32,000 Accounts receivable decreased $26,000 Loss on sale of a depreciable asset was $21,000 Wages payable increased $15,000 Unearned revenue decreased $21,000 Patent amortization expense was $15,000 How much was DJ's net income

Answer 1

Answer:

$304,000

Explanation:

Calculation to determine How much was DJ's net income

Net cash inflow from operating activities ($262,000)

Less Account spayable decrease ($26,000)

Less Prepaid asset increase ($20,000)

Add Depreciation expense $32,000

Add Accounts receivable decrease $26,000

Add Loss on sale of depreciable asset $21,000

Add Wages payable increase $15,000

Less Unearned revenue decrease $21,000

Add Patent amortization expense $15,000

Net income $304,000

Therefore DJ's net income is $304,000