Question

Chapter 13: Statement of Cash Flows Amount OA, IA, or FA (for extra credit only) Accounts payable increase $ 9,000 Accounts receivable increase 4,000 Salaries payable decrease 3,000 Amortization expense 6,000 Cash balance, January 1 22,000 Cash balance, December 31 15,000 Cash paid as dividends 29,000 Cash paid to purchase land 90,000 Cash paid to retire bonds payable at par 60,000 Cash received from issuance of common stock 35,000 Cash received from sale of equipment 17,000 Depreciation expense 29,000 Gain on sale of equipment 4,000 Inventory decrease 13,000 Net income 76,000 Prepaid expenses increase 2,000 Using the information above, calculate the cash flow from operating activities using the indirect method.

Answer 1

Answer:

Net Cash flow from operating activities $120,000.00

Explanation:

The computation of the cash flows from operating activities is shown below:

Cash flow from operating activities  

Income       $76,000.00  

Less: Gain on sale of equipment           (4,000.00)  

Add: Depreciation expense           29,000.00  

Add: Amortisation expense             6,000.00  

Adjustments:  

Add: Account payable increase             9,000.00  

Less: Account receivable increase           (4,000.00)  

Less: Salaries payable decrease           (3,000.00)  

Add: Inventory decrease             13,000.00  

Less: Prepaid expese increase           (2,000.00)  

Net Cash flow from operating activities $120,000.00