In: Accounting
Kennedy, Inc. reported the following data:
Net income | $179,562 |
Depreciation expense | 15,511 |
Loss on disposal of equipment | 11,046 |
Gain on sale of building | 21,801 |
Increase in accounts receivable | 8,734 |
Decrease in accounts payable | 3,109 |
Required: | |
Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. Refer to the list of Amount Descriptions 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. |
Partial Statement of Cash Flows |
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for the year ending 31 Dec |
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Cash Flows from Operating activities |
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Net Income |
$179,562 |
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Adjustments to reconcile net income to |
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Net Cash provided by Operating activities |
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Depreciation expense |
$15,511 |
|
Loss on Disposal of equipment |
$11,046 |
|
Gain on sale of building |
($21,801) |
|
Increase in accounts receivables |
($8,734) |
|
Decrease in accounts payable |
($3,109) |
|
($7,087) |
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Net Cash provided from Operating activities |
$172,475 |
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 |