Question

Selected data derived from the income statement and balance sheet of National Beverage Co. for a recent year are as follows:

1	Income statement data (in thousands):
2	Net income	$49,311.00
3	Gain on disposal of property	1,188.00
4	Depreciation expense	11,580.00
5	Other items involving noncash expense	1,383.00
6	Balance sheet data (in thousands):
7	Increase in accounts receivable	1,746.00
8	Decrease in inventory	990.00
9	Increase in prepaid expenses	605.00
10	Decrease in accounts payable and other current liabilities	1,705.00

Required:

A.

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method for National Beverage Co. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required.

B.

Interpret your results in part (a). Amount Descriptions Amortization of intangible assets Decrease in accounts payable and other current liabilities Decrease in accounts receivable Decrease in inventory Depreciation expense Gain on disposal of property Gains on fixed assets Increase in accounts payable and other current liabilities Increase in accounts receivable Increase in prepaid expenses Net cash flow from operating activities Net cash flow used for operating activities Net income Other items involving noncash expense Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method for National Beverage Co. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. National Beverage Co. Cash Flows from Operating Activities (in thousands) 1 Cash flows from operating activities: 2 3 Adjustments to reconcile Net income to net cash flow from operating activities: 4 5 6 7 Changes in current operating assets and liabilities: 8 9 10 11 12

Answer 1

National Beverage Co.
Cash Flows from Operating Activities (in thousands)
A. Cash Flows from Operating Activity
Net Income		$        49,311.00
Adjustments to reconcile Net income to net cash flow from operating activities:
Depreciation expense	$     11,580.00
Other items involving noncash expense	$       1,383.00
Gain on disposal of Property	$     (1,188.00)
Changes in current operating assets and liabilities:
Decrease in Inventory	$           990.00
Increase in Accounts receivables	$     (1,746.00)
Increase in prepaid Expenses	$         (605.00)
Decrease in Accounts payable and Other current liabilities	$     (1,705.00)
		$          8,709.00
Net cash flow from Operating activities		$        58,020.00

General notes for cash flow

Cash is increased when Current liability increase or Current asset Decrease.

Cash is Decreased when Current liability Decrease or Current asset Increase.

Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash

Gain on sale of any asset is treated as cash outflow for operating activities. Sale of asset comes to Investing activities.