Software Distributors reports net income of $54,000. Included in that number is depreciation expense of $9,500 and a loss on the sale of land of $4,900. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $24,000, a decrease in inventory of $14,500, and an increase in accounts payable of $44,000. Prepare the operating activities section of the statement of cash flows using the indirect method.

Question

Marcel Callahan

Business

27 June, 16:47

Software Distributors reports net income of $54,000. Included in that number is depreciation expense of $9,500 and a loss on the sale of land of $4,900. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $24,000, a decrease in inventory of $14,500, and an increase in accounts payable of $44,000. Prepare the operating activities section of the statement of cash flows using the indirect method.

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Megan Bean · Answer 1

Cash flow from operating 150,900

Explanation:

The operating activities section of he cash flow statement would like this

$

Net Income 54,000

Adjustments:

Add depreciation expense 9.500

Add loss on sale of land 4,900

decrease in account receivable 24,000

Decrease in inventory 14,500

Decrease in payable 44,000

Cash flow from operating 150,900

All decrease in assets and increase in liabilities are added. All increase in assets and decrease in liabilities are subtracted.