Bonita Company’s income statement for the year ended December 31, 2017, containe
ID: 2583578 • Letter: B
Question
Bonita Company’s income statement for the year ended December 31, 2017, contained the following condensed information.
$841,000
$624,000
59,000
25,000
708,000
133,000
40,000
$93,000
Bonita’s balance sheet contained the following comparative data at December 31.
2017
2016
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the indirect method.
$841,000
Operating expenses (excluding depreciation)$624,000
Depreciation expense59,000
Loss on sale of equipment25,000
708,000
Income before income taxes133,000
Income tax expense40,000
Net income$93,000
Explanation / Answer
Cash Flow Statement (using Indirect Method).
Particulars Amount ($) Amount ($) Net Incom 93000 Add : Depriciation 59000 Add : Loss on sale of Equipment 25000 Operating Profit before working capital changes 177000 Add : increase in Account Payable ($41000 - $31000) 10000 Add : Decrease in Accounts Receivable($53000 - $35000) 18000 Less : Decrease in Income taxes payable($8000 - $3800) (4200) Cash Flow from Operating Activities 200800