Income Statement Sales Revenue Expenses $49,600 Cost of Goods Sold Depreciation
ID: 2582108 • Letter: I
Question
Income Statement Sales Revenue Expenses $49,600 Cost of Goods Sold Depreciation Expense Salaries and Wages Expense Rent Expense Insurance Expense Interest Expense Utilities Expense 21,500 2,100 9,100 4,600 1,950 1,850 1,450 Net Income $ 7,050 Selected Balance Sheet Accounts Ending Beginning Balances Balances Accounts Receivable Inventory Accounts Payable Prepaid Rent Prepaid Insurance Salaries and Wages Payable Utilities Payable $ 565 980 425 27 26 98 590 765 470 21 30 59 Required Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) DIRECT PRODUCTS COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31 Cash Flows from Operating Activities Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Total AdjustmentsExplanation / Answer
Solution:-
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DIRECT PRODUCTS COMPANY Statement of cash flows (partial) For the year ended december 31 Cash flows from operating activities: Net income 7,050 Adjustments to reconcile net income to net cash provided by operating activities: + Depreciation 2,100 + Decrease in Accounts receivable 25 - Increase in inventory (215) - Decrease in accounts payable (45) - Increase in prepaid rent (6) + Decrease in prepaid insurance 4 + Incrase in salaries and wages payable 39 + Increase in utilities payable 6 Total adjustment 1,908 Net cash flow from operating activities 8,958