Question

income statement for year ended in ded 31 2014

sales 755,000

cogs 543,000

gros profit 212,00

operating expenses

selling expenses 52,000

Admin exp 141,000

net income 71,000

addl info

1 a/ r decreaded by 63,000

2 inventory increased 38,000

3 prepaid expensed increased 12,000

4 a/p increased 25,000

5 accrued expense payable 6,000

6 admin expenses include deprecation expenses of 20,000

Instruction: Prepare the operating section of the cash flow statement using the indirect method.
		account name
		sign +/-
		$amount
Net cash flow from operating activities
	Net income
	Net Cash flow from operating activities

Answer 1

Statement of cash flow
Particulars		Amount
Net income before taxes		71,000
Adjustments to reconcile net income:
Depreciation		20,000
Working capital changes:
		-
Decrease in a/r		63,000
(increase) in inventory		(38,000)
(increase) in prepaid expenses		(12,000)
a/p increase		25,000
Accrued expenses payable		6,000
		-
Net cash from operations		135,000
Income taxes paid		-
Net cash from operating activities		135,000