Question

Cash Flows from Operating Activities—Indirect Method

Selected data (in thousands) derived from the income statement and balance sheet of National Beverage Corp. for a recent year are as follows:

Income statement data:
Net income	$49,340
Gain on disposal of property	1,230
Depreciation expense	11,620
Other items involving noncash expenses	1,380
Balance sheet data:
Increase in accounts receivable	1,755
Decrease in inventory	1,010
Increase in prepaid expenses	595
Decrease in accounts payable	670
Decrease in accrued and other current liabilities	1,015

a. Prepare the “Cash flows from operating activities” section of the statement of cash flows, using the indirect method for National Beverage Corp. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Enter the amounts in thousands of dollars, as shown above.

National Beverage Co.
Cash Flows from Operating Activities
(in thousands)
Cash flows from (used for) operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$

b. The company has   earnings and   net cash flow from operating activities. The increase in accounts receivable indicates a(n)   in sales. In addition, the company is using its cash to decrease its accounts payable balance, which indicates that the company is  . Overall, National Beverage is doing   financially.

Answer 1

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