Cash Flows from (Used for) Operating Activities The income statement disclosed the following items for the year: Depreciation expense Gain on disposal of equipment Net income The changes in the current asset and liability accounts for the year are as follows: Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable Increase (Decrease) $5,190 (2,950) (1,110) (3,520) 1,110 780 $33,300 19,440 225,100 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flows from operating activities b. Why is net cash flows from operating activities different than net income? Ca flows from operating activities is based on C of accounting. Q00 00000 of accounting, whereas net income is computed using

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Cash Flows from (Used for) Operating Activities
The income statement disclosed the following items for the year:
Depreciation expense
Gain on disposal of equipment
Net income
The changes in the current asset and liability accounts for the year are as follows:
Accounts receivable
Inventory
Prepaid insurance
Accounts payable
Income taxes payable
Dividends payable
Increase
(Decrease)
$5,190
(2,950)
(1,110)
(3,520)
1,110
780
$33,300
19,440
225,100
a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus
sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Statement of Cash Flows (partial)
Cash flows from (used for) operating activities:
27
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Changes in current operating assets and liabilities:
Net cash flows from operating activities
b. Why is net cash flows from operating activities different than net income?
Cash flows from operating activities is based on
of accounting.
0000000
of accounting, whereas net income is computed using
Transcribed Image Text:Cash Flows from (Used for) Operating Activities The income statement disclosed the following items for the year: Depreciation expense Gain on disposal of equipment Net income The changes in the current asset and liability accounts for the year are as follows: Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable Increase (Decrease) $5,190 (2,950) (1,110) (3,520) 1,110 780 $33,300 19,440 225,100 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: 27 Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flows from operating activities b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on of accounting. 0000000 of accounting, whereas net income is computed using
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