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or Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $2,253,000 1,103,970 1,149,030 $308,661 54,072 60,831 6,759 24,783 455,106 693,924 9,012 Gain on sale of equipment Net income 2$ 702,936 $21,050 increase 35,000 increase Accounts receivable Accounts payable Salaries payable $13,775 decrease Inventory 4,700 decrease Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should indicated with a minus sign.) Statement of Cash Flows (Partial) Cash flows from operating activities 24 308,661 Salaries expense 69,831 Rent expense 24,783 Utilities expense

or Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $2,253,000 1,103,970 1,149,030 $308,661 54,072 60,831 6,759 24,783 455,106 693,924 9,012 Gain on sale of equipment Net income 2$ 702,936 $21,050 increase 35,000 increase Accounts receivable Accounts payable Salaries payable $13,775 decrease Inventory 4,700 decrease Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should indicated with a minus sign.) Statement of Cash Flows (Partial) Cash flows from operating activities 24 308,661 Salaries expense 69,831 Rent expense 24,783 Utilities expense

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Can you please check my work

SONAD COMPANY Income Statement For Year Ended December 31 Sales $2,253,000 1,103,970 1,149,030 Cost of goods sold Gross profit Operating expenses Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $308,661 54,072 60,831 6,759 24,783 455,106 693,924 9,012 Gain on sale of equipment Net income 702,936 $21,050 increase 35,000 increase Accounts payable Salaries payable $13,775 decrease 4,700 decrease Accounts receivable Inventory Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (Partial) Cash flows from operating activities 308,661 Salaries expense 69,831 Rent expense 24,783 Utilities expense %24
Transcribed Image Text:SONAD COMPANY Income Statement For Year Ended December 31 Sales $2,253,000 1,103,970 1,149,030 Cost of goods sold Gross profit Operating expenses Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $308,661 54,072 60,831 6,759 24,783 455,106 693,924 9,012 Gain on sale of equipment Net income 702,936 $21,050 increase 35,000 increase Accounts payable Salaries payable $13,775 decrease 4,700 decrease Accounts receivable Inventory Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (Partial) Cash flows from operating activities 308,661 Salaries expense 69,831 Rent expense 24,783 Utilities expense %24
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Step 1

The Statement of Cash Flows indirect method begins with Net Income, then adjusts for non-cash items and changes in current assets and current liabilities to arrive at the Cash Flow from Operations. It is generally easier to prepare than the Statement of Cash Flows direct method, which lists all receipts and payments of cash by individual source.

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