Tamarisk Corporation had the following 2017 income statement. $183,000 118,000 6
ID: 2559932 • Letter: T
Question
Tamarisk Corporation had the following 2017 income statement.
$183,000
118,000
65,000
45,000
$20,000
The following accounts increased during 2017: Accounts Receivable $13,000, Inventory $11,000, Accounts Payable $13,000. Prepare the cash flows from operating activities section of Tamarisk’s 2017 statement of cash flows using the indirect method.
$183,000
Cost of goods sold118,000
Gross profit65,000
Operating expenses (includes depreciation of $19,000)45,000
Net income$20,000
Tamarisk Corporation Statement of Cash Flows-Indirect Method (Partial) December 31, 2017 Cash Flows from Operating Activitles Net Income Adjustments to reconcile net income toExplanation / Answer
Cash flows from operating activities Particulars Amount $ Amount $ Net Income 20,000 Non cash Non operating Items Add: Depreciation 19,000 19,000 Decrease in current assets and increase in current liabilities Increase in accounts payable 13,000 13,000 Less: Increase in current assets and decrease in current liabilities Increase in accounts receivable (13,000) Increase in Inventory (11,000) (24,000) Net cash provided by operating activities 28,000