Net Cash Flow From Operating Activities Verna Company\'s records provided the fo
ID: 2526647 • Letter: N
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 effectsfrom working capital items: $
Explanation / Answer
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