Check my wor The following income statement and information about changes in non
ID: 2333662 • Letter: C
Question
Check my wor The following income statement and information about changes in noncash current assets and current liabilities are reported SONAD COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $2,135,eee 1,046,15e 1,088,850 Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $292,495 51,240 57,645 6,405 23,485 431,270 657,580 8,540 $ 666,120 Gain on sale of equipment Net income Changes in current asset and current liability accounts for the year that relate to operations follow Accounts receivable Inventory $41,300 increase 22,650 increa Accounts payable Salaries payable $13,550 decrease 2,700 decrease seExplanation / Answer
Answer
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
Cash Flows from Operating Activities
Net Income
$ 666,120.00
Adjustments to reconcile Net Income to net cash provided by operating activities
Income Statement items not affecting Cash
Depreciation Expense
$ 51,240.00
Amortization expense - Patents
$ 6,405.00
Gain on sale of Equipment
$ (8,540.00)
Changes in Current Operating assets & Liabilities
Increase in Accounts receivables
$ (41,300.00)
Increase in Inventory
$ (22,650.00)
Decrease in Accounts payable
$ (13,550.00)
Decrease in Salaries Payable
$ (2,700.00)
Net Cash Provided by Operating Activities
$ 635,025.00
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