Portions of the financial statements for Software Associates are provided below. SOFTWARE ASSOCIATESIncome StatementFor the year ended December 31, 2021 Net sales $650,000Expenses: Cost of goods sold$390,000 Operating expenses124,000 Depreciation expense32,400 Income tax expense46,000 Total expenses 592,400Net income $57,600 SOFTWARE ASSOCIATES Selected Balance Sheet Data December 31, 2021, compared to December 31, 2020 Decrease in accounts receivable$9,400Decrease in inventory12,400Increase in prepaid rent2,400Decrease in salaries payable3,400Increase in accounts payable6,400Increase in income tax payable7,400 Required:Prepare the operating activities section of the statement of cash flows for Software Associates using the direct method. (List cash outflows as negative amounts.) SOFTWARE ASSOCIATESStatement of Cash Flow (Partial)For the Year Ended December 31, 2021Cash Flows from Operating Activities: Net cash flows from operating activities $0

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Answered: Portions of the financial statements…

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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Portions of the financial statements for Software Associates are provided below.

SOFTWARE ASSOCIATES Income Statement For the year ended December 31, 2021
Net sales		$650,000
Expenses:
Cost of goods sold	$390,000
Operating expenses	124,000
Depreciation expense	32,400
Income tax expense	46,000
Total expenses		592,400
Net income		$57,600

SOFTWARE ASSOCIATES
Selected Balance Sheet Data
December 31, 2021, compared to December 31, 2020
Decrease in accounts receivable	$9,400
Decrease in inventory	12,400
Increase in prepaid rent	2,400
Decrease in salaries payable	3,400
Increase in accounts payable	6,400
Increase in income tax payable	7,400

Required:

Prepare the operating activities section of the statement of cash flows for Software Associates using the direct method. (List cash outflows as negative amounts.)

SOFTWARE ASSOCIATES
Statement of Cash Flow (Partial)
For the Year Ended December 31, 2021
Cash Flows from Operating Activities:






Net cash flows from operating activities		$0

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