Computation of Net Cash Flows from Operating Activities Indirect Method   Dec. 31, 2011 Jan. 1, 2011 Income statement:     Net Income $385,000   Depreciation Expense 125,000   Amortization of Intangible Assets 40,000   Gain on Sale of Plant Assets 90,000   Loss on Sale of Investments 35,000   Balance sheet:     Accounts Receivable $335,000 $380,000 Inventory 503,000 575,000 Prepaid Expenses 22,000 10,000 Accounts Payable (to merchandise suppliers) 379,000 410,000 Accrued Expenses Payable 180,000 155,000 Required: Using this information, prepare a partial statement of cash flows for the year ended December 31, 2011, showing the computation of net cash flows from operating activities by the indirect method.

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Computation of Net Cash Flows from Operating Activities Indirect Method

 

Dec. 31, 2011

Jan. 1, 2011

Income statement:

 

 

Net Income

$385,000

 

Depreciation Expense

125,000

 

Amortization of Intangible Assets

40,000

 

Gain on Sale of Plant Assets

90,000

 

Loss on Sale of Investments

35,000

 

Balance sheet:

 

 

Accounts Receivable

$335,000

$380,000

Inventory

503,000

575,000

Prepaid Expenses

22,000

10,000

Accounts Payable (to merchandise suppliers)

379,000

410,000

Accrued Expenses Payable

180,000

155,000

Required: Using this information, prepare a partial statement of cash flows for the year ended December 31, 2011, showing the computation of net cash flows from operating activities by the indirect method.

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