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 $57,000 24,000 542,000 Income taxes payable Dividends payable Increase (Decrease) $9,800 (5,550) (1,000) (3,700) 1,440 2,200 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.

FINANCIAL ACCOUNTING
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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
$57,000
24,000
542,000
Increase
(Decrease)
$9,800
(5,550)
(1,000)
(3,700)
1,440
2,200
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.
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 $57,000 24,000 542,000 Increase (Decrease) $9,800 (5,550) (1,000) (3,700) 1,440 2,200 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.
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:
Net income
✓
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Depreciation expense ✓ ✓
Gain on disposal of equipment
✓
Changes in current operating assets and liabilities:
Increase in accounts receivable
Decrease in inventory
Decrease in prepaid insurance
Decrease in accounts payable
Increase in income taxes payable
Net cash flows from operating activities
Feedback
00 00000
Transcribed Image Text: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: Net income ✓ Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation expense ✓ ✓ Gain on disposal of equipment ✓ Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventory Decrease in prepaid insurance Decrease in accounts payable Increase in income taxes payable Net cash flows from operating activities Feedback 00 00000
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