Question:
The net income reported on an income statement for the current year was $58,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current assets and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activites section of a statement of cash flows using the indirect method.
End Beginning
Cash $65,000 $70,000
Accounts Receivable (net) 70,000 63,000
Inventories 85,000 102,000
Prepaid Expenses 4,000 4,500
Accounts Payable
(merchandise creditors) 50,000 58,000
Cash dividends Payable 4,500 6,500
Salaries Payable 6,000 7,500