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Cash Flows from Operating Activities—Indirect Method Staley Inc. reported the following data: Net income $417,900 Depreciation...

Cash Flows from Operating Activities—Indirect Method

Staley Inc. reported the following data:

Net income $417,900
Depreciation expense 64,500
Loss on disposal of equipment 28,300
Increase in accounts receivable 24,400
Increase in accounts payable 11,400

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Statement of Cash Flows (partial)Cash flows from operating activities: $Adjustments to reconcile net income to net cash flow from operating activities:  Changes in current operating assets and liabilities:  Net cash flow from operating activities$

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Expert Solution

--Requirement

Statement of Cash Flows (partial)
Cash flows from operating activities:
Net Income $417,900
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation Expense $64,500
Loss on disposal of equipment $28,300 $92,800
Changes in current operating assets and liabilities:  
Increase in accounts receivables ($24,400)
Increase in accounts payable $11,400 ($13,000)
Net cash flow from operating activities$ $497,700
No. Conceptual Notes
1 Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2 Effects of Non - Cash Transaction are adjusted from Net Income.
3 Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4 Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5 Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income

ekkarill92 answered 2 years ago
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