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:
Net income	$
Adjustment for noncash income items:
Less: Loss on sale of land
Add: Patent amortization expense
Add: Depletion expense
Less: Amortization of discount on investment in bonds
Less: Depreciation expense
Adjustments for cash flow effects from working capital items:
		$

Answer 1

Statement of cash flow (Partial)
Operating activities
Nrt Income	$68,400
Adjustment for noncash income items:
Less: Loss on sale of land	1,900.00
Add: Patent amortization expense	1,600.00
Add: Depletion expense	5,000.00
Less: Amortization of discount on investment in bonds	1,500.00
Less: Depreciation expense	10,000.00
Add: ordinary loss	6,200.00
Less: ordinary gain	(3,700.00)
Gain on sale of equipment	(6,100.00)
Adjustments for cash flow effects
from working capital items:	17000
Increase in Inventories	-7800
Decrease in Accounts Payable	-4600
Increase in Income tax payable	2,700
Decrease in Deferred Taxes payable	(2,500)
Decrease in salaries payable	(1,400.00)
Decrease in Accounts payable	3,500.00
Net cash from operating activities		91,700.00
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