In: Accounting
Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2021 fiscal year was $624,000. Depreciation and amortization expense of $87,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash:
Decrease in accounts receivable
...........$22,000
Increase in inventory ..................................9,200
Increase prepaid expenses ........................8,500
Increase in salaries payable ....................10,000
Decrease in income taxes payable ........14,000
Required:
Prepare the operating activities section of the 2021 statement of cash flows.
Cash flows from operating activities:
Net income $624,000
Adjustments for noncash effects:
Depreciation and amortization expense 87,000
Changes in operating assets and liabilities:
Decrease in accounts receivable 22,000
Increase in inventory (9,200)
Increase in prepaid expenses (8,500)
Increase in salaries payable 10,000
Decrease in income taxes payable (14,000)
Net cash flows from operating activities $711,300
Net cash flows from operating activities $711,300