Question

The following information relates to the Walnut Company for 2019:

Gain on sale of land	$ 800
Bond payable premium amortization	300
Decrease in accounts payable	700
Increase in prepaid expenses	100
Net income	9,400
Purchased equipment	15,000
Increase in salaries payable	400
Proceeds from sale of land	7,000
Decrease in inventories	2,100
Payment of dividends	1,600
Depreciation expense	1,000

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Required:
Compute net cash provided by operating activities for the Walnut Company for 2019.

Answer 1

Cash flow from operating activities = $11,600

Working

Walnut Company
Cash Flow Statement
Cash Flow from Operating Activities:
Net Income	$          9,400.00
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of land	$           (800.00)
Bond payable premium amortization	$              300.00
Depreciation expense	$          1,000.00
Decrease in accounts payable	$           (700.00)
Increase in prepaid expenses	$           (100.00)
Increase in salaries payable	$              400.00
Decrease in inventories	$          2,100.00
A. Cash Flow from Operating Activities		$         11,600.00