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In: Accounting

The following income statement and information about changes in noncash current assets and current liabilities are...

The following income statement and information about changes in noncash current assets and current liabilities are reported.

SONAD COMPANY
Income Statement
For Year Ended December 31, 2017
Sales $ 2,353,000
Cost of goods sold 1,152,970
Gross profit 1,200,030
Operating expenses
Salaries expense $ 322,361
Depreciation expense 56,472
Rent expense 63,531
Amortization expenses–Patents 7,059
Utilities expense 25,883 475,306
724,724
Gain on sale of equipment 9,412
Net income $ 734,136


Changes in current asset and current liability accounts for the year that relate to operations follow.

Accounts receivable $ 44,750 increase Accounts payable $ 8,450 decrease
Inventory 12,750 increase Salaries payable 3,550 decrease

Required:

Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Statement of Cash Flows (partial)
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities
$0

Solutions

Expert Solution

SONAD COMPANY
Cash Flow Statement (partial)
For year ended 31st December 2017
A. Cash Flows from Operating Activity
Net Income $    7,34,136.00
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Depreciation expense $       56,472.00
Gain on sale of equipment $       (9,412.00)
Patent amortization expense $          7,059.00
Changes in current operating assets and liabilities
Increase in Accounts receivables $     (44,750.00)
Increase in Inventory $     (12,750.00)
Decrease in Accounts Payable $       (8,450.00)
Decrease In salaries payable $       (3,550.00)
Net cash flow from Operating activities $    7,18,755.00

ekkarill92 answered 5 months ago
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