Salud Company reports the following information. Selected Annual Income Statement Data Selected Year-End Balance Sheet Data...

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

Expert Solution

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

ekkarill92 answered 2 years ago

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