Answer and Explanation:
The preparation of the cash flow from the operating activities is presented below:
Marion Company
Cash flow statement
Cash flow from operating activities
Net income $170,000
Adjustment made
Add: Depreciation expenses $50,000
less: Increase in account receivable -$8,000 ($40,000 - $32,000)
Add: Decrease in inventory $8,000 ($50,000 - $58,000)
Less: Decrease in account payable -$7,000 ($11,000 - $18,000)
Add: Increase in salaries payable $4,000 ($10,000 - $6,000)
Net cash provided by operating activities $217,000
The cash inflow represents in a positive sign and the cash outflow represents in a negative sign
