Prepare the Cash Flows from Operating Activities section of the statement of cas
ID: 2477683 • Letter: P
Question
Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method. Use a minus sign to indicate cash outflows, a decrease in cash, or cash payments.
Dorman Company
Statement of Cash Flows
Cash flows from operating activities:
Depreciation
Gain on disposal of equipment
Net income
Correct 5
Correct 6
Adjustments to reconcile net income to net cash flow from operating activities:
Add: Depreciation
Add: Decrease in accounts payable
Deduct: Depreciation
Correct 8
Correct 9
Add: Gain on disposal of equipment
Deduct: Decrease in accounts receivable
Deduct: Gain on disposal of equipment
Correct 10
Correct 11
Changes in current operating assets and liabilities:
Add: Decrease in accounts receivable
Add: Gain on disposal of equipment
Deduct: Decrease in accounts receivable
Correct 13
Correct 14
Add: Decrease in accounts payable
Deduct: Decrease in accounts payable
Deduct: Depreciation
Correct 15
Correct 16
Net cash flow from operating activities
Correct 18
HideDorman Company
Statement of Cash Flows
Cash flows from operating activities:
Depreciation
Gain on disposal of equipment
Net income
Correct 5
$Correct 6
Adjustments to reconcile net income to net cash flow from operating activities:
Add: Depreciation
Add: Decrease in accounts payable
Deduct: Depreciation
Correct 8
Correct 9
Add: Gain on disposal of equipment
Deduct: Decrease in accounts receivable
Deduct: Gain on disposal of equipment
Correct 10
Correct 11
Changes in current operating assets and liabilities:
Add: Decrease in accounts receivable
Add: Gain on disposal of equipment
Deduct: Decrease in accounts receivable
Correct 13
Correct 14
Add: Decrease in accounts payable
Deduct: Decrease in accounts payable
Deduct: Depreciation
Correct 15
Correct 16
Net cash flow from operating activities
$Correct 18
Explanation / Answer
Dorman Company
Cash Flows from Operating Activities section of the statement of cash flows using the indirect method.
Cash Flow from operating activities (Amount in $)
Net Income 225,000
Adjustments to reconcile net income to net cash flow from operating activities:
Add: Depreciation 25,000
Deduct: Gain on disposal of equipment (20,500)
Changes in current operating assets and liabilities:
Add: Decrease in accounts receivable 14,000
Deduct: Decrease in accounts payable (3,600)
Net cash flow from operating activities 239,900