Answer:
Peak Heights Company
PEAK HEIGHTS COMPANY
Statement of Cash Flows
Operating Activities Section
Net income                                             $15,625
Non-cash flow: Depreciation                    6,700
Changes in working capital:
Accounts receivable                              -$4,400
Inventory                                                   4,000
Salaries payable                                          750
Net cash from operating activities     $22,675
Explanation:
A) Data and Calculations:
Peak Heights Company:
Income Statement for Current Year
Sales                                                        $85,900
Expenses Cost of goods sold $51,675
Depreciation expense                6,700
Salaries expense                       11,900    70,275
Net income                                             $15,625
Partial Balance Sheet   Current year   Prior year    Changes
Accounts receivable         $9,800         $14,200     -$4,400
Inventory                             13,100             9,100         4,000
Salaries payable                  1,620                870            750