In: Accounting
Salud Company reports the following information.
Selected Annual Income Statement Data | Selected Year-End Balance Sheet Data | |||||||
Net income | $ | 450,000 | Accounts receivable increase | $ | 44,400 | |||
Depreciation expense | 93,500 | Prepaid expenses decrease | 16,500 | |||||
Gain on sale of machinery | 24,800 | Accounts payable increase | 8,800 | |||||
Wages payable decrease | 2,500 | |||||||
Use the indirect method to prepare the operating
activities section of its statement of cash flows for the year
ended December 31. (Amounts to be deducted should be
indicated with a minus sign.)
Statement of Cash Flow (Partial)
cash flow from operating activities
Adjustment to reconcile net income to operating cash flow
Statement of Cash Flow (Partial) | ||
cash flow from operating activities | ||
Net Income | $450,000 | |
Adjustment to reconcile net income to operating cash flow | ||
Depreciation expense | $93,500 | |
Gain on sale of machinery | ($24,800) | |
Accounts receivable increase | ($44,400) | |
Prepaid expenses decrease | $16,500 | |
Accounts payable increase | $8,800 | |
Wages payable decrease | ($2,500) | $47,100 |
Net Cash flows provided by Operating activities | $497,100 |
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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 |