Question

Hampton Company reports the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Sales $ 71,000 Accounts receivable increase $ 8,000 Expenses Inventory decrease 4,000 Cost of goods sold 42,000 Salaries payable increase 1,000 Salaries expense 10,000 Depreciation expense 5,000 Net income $ 14,000
Required: Prepare the operating activities section of the statement of cash flows for Hampton Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

See below

Explanation:

Statement of cash flow from operating activities using the indirect method.

Net income

$14,000

Adjustment for non cash items:

Depreciation expense

$5,000

Adjustments for changes in working capital:

Increase in accounts receivables

($8,000)

Decrease in inventory

$4,000

Increase in salaries payable

$1,000

Net cash from operating activities

$16,000