Arundel Company disclosed the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Revenues $ 100,000 Accounts receivable decrease $ 24,000 Expenses Purchased a machine for cash 10,000 Salaries expense 84,000 Salaries payable increase 18,000 Utilities expense 14,000 Other accrued liabilities decrease 8,000 Depreciation expense 14,600 Other expenses 3,400 Net loss $ (16,000) Required: 1. Prepare the operating activities section of the statement of cash flows using the indirect method. (Any loss or amounts to be deducted should be indicated with a minus sign.)

Question

Brooks Case

Business

3 October, 18:33

Arundel Company disclosed the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Revenues $ 100,000 Accounts receivable decrease $ 24,000 Expenses Purchased a machine for cash 10,000 Salaries expense 84,000 Salaries payable increase 18,000 Utilities expense 14,000 Other accrued liabilities decrease 8,000 Depreciation expense 14,600 Other expenses 3,400 Net loss $ (16,000) Required: 1. Prepare the operating activities section of the statement of cash flows using the indirect method. (Any loss or amounts to be deducted should be indicated with a minus sign.)

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Ellis Goodman · Answer 1

The preparation of the Cash Flows from Operating Activities-Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net loss - $16,000

Adjustment made:

Add : Depreciation expense $14,600

Add: Decrease in accounts receivable $24,000

Add: Increase in salaries payable $18,000

Less: Decrease in accrued liabilities - $8,000

Total of Adjustments $48,600

Net Cash flow from Operating activities $32,600