Question

Net Cash Flow From Operating Activities

Verna Company's records provided the following information for 2016:

Decrease in accounts payable, $4,600

Loss on sale of land, $1,900

Increase in inventory, $7,800

Increase in income taxes payable, $2,700

Net income, $68,400

Patent amortization expense, $1,600

Ordinary loss, $6,200

Decrease in deferred taxes payable, $2,500

Amortization of discount on bonds payable, $1,300

Payment of cash dividends, $24,000

Depletion expense, $5,000

Decrease in salaries payable, $1,400

Decrease in accounts receivable, $3,500

Gain on sale of equipment, $6,100

Proceeds from issuance of stock, $57,000

Ordinary gain, $3,700

Depreciation expense, $10,000

Amortization of discount on investment in bonds, $1,500

Required

Prepare the operating activities section of Verna's 2016 statement of cash flows using the indirect method. Use a minus sign to indicate cash outflows or decreases in cash.

VERNA COMPANY
Statement of Cash Flows (Partial)
For Year Ended December 31, 2016
Operating Activities:
	$
Adjustment for noncash income items:
Adjustments for cash flow effects from working capital items:
		$

Answer 1

VERNA COMPANY
Cash flow from operating activities
for the year 2016
Net income		68400
Adjustment for non-cash items
Loss on sale of land	1900
Patent amortization expense	1600
Depletion Expense	5000
Gain on sale of equipment	-6100
Depreciation expense	10000
Net adjustment for non-cash items		12400
Adjustment for changres in working capital
Decrease in accounts payable	-4600
Increase in inventory	-7800
Increase in income teaxes payable	2700
Decrease in deferred taxes payable	-2500
Decrease in salaries payable	-1400
Decrease in accounts receivable	3500
Net adjustment for changes in working capital		-10100
Net cash flow from (used in) operating activities		70700