Question

Annual Income Statement Data Selected Year-End Balance Sheet Data Sales $ 50,000 Prepaid expenses increase $ 3,000 Expenses: Inventory increase 500 Cost of goods sold 30,000 Accounts payable decrease 1,000 Wages expense 10,000 Amortization expense 1,500 Net income $ 8,500 Prepare the operating activities section of the statement of cash flows for GreenGarden using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

see calculation and working below

Explanation:

operating activities section

Net income                                                               $ 8,500

Adjust for changes in non- cash items :

Amortization expense                                                $1,500

Adjust for changes in working capital :

Prepaid expenses increase                                   ($ 3,000)

Inventory increase                                                     ($500)

Accounts payable decrease                                   ($1,000)

Net Cash Provided by Operating Activities            $5,500