Question

SONAD COMPANY Income Statement For Year Ended December 31, 2017
Sales				$	2,321,000
Cost of goods sold					1,137,290
Gross profit					1,183,710
Operating expenses
Salaries expense	$	317,977
Depreciation expense		55,704
Rent expense		62,667
Amortization expenses—Patents		6,963
Utilities expense		25,531			468,842
					714,868
Gain on sale of equipment					9,284
Net income				$	724,152

     
Changes in current asset and current liability accounts for the year that relate to operations follow.

Accounts receivable	$	40,500		increase		Accounts payable	$	13,350		decrease
Inventory		31,675		increase		Salaries payable		4,000		decrease

      
Use the direct method to prepare only the cash provided or used by operating activities section of the statement of cash flows for this

Statement of cash flows

Cash flows from operating activities

Net cash provided by operating activities

Answer 1

SONAD COMPANY
Statement of Cash Flows (Partial)
For the Year ended Dec 31, 2017
Cash Flow From opearting Activities
Cash recd from Cutomers	2,280,500.00
Cash Paid to Suppliers	(1,182,315.00)
Cash Paid For Operating Exp.	(410,175.00)
Cash Flow from Operating Activities		688,010.00

Calculation of Cash Recd. From Customers
Sales Revenue	2,321,000.00
Less: Increase in Accounts Receivables	(40,500.00)
Cash recd from Customers	2,280,500.00
Calculation of cash Paid to Suppliers
Cost of Goods Sold	1,137,290.00
Add: Increase in Inventory	31,675
Purchases made during the year	1,168,965
Add: Decrease in Accounts Payable	13,350
Cash Paid to Suppliers	1,182,315
Calculation of Cash paid for Operating Exp
Operating Exp.	468,842.00
Less: Depreciation Expense	(55,704.00)
Less: Amortization Expense - Patents	(6,963.00)
Balance	406,175.00
Add: Decrease in Salaries Payable	4,000
Total Expenses Due	410,175