Portions of the financial statements for Software Associates are provided below. SOFTWARE ASSOCIATESIncome StatementFor the year ended December 31, 2021 Net sales $670,000Expenses: Cost of goods sold$400,000 Operating expenses126,000 Depreciation expense32,600 Income tax expense47,000 Total expenses 605,600Net income $64,400 SOFTWARE ASSOCIATES Selected Balance Sheet Data December 31, 2021, compared to December 31, 2020 Decrease in accounts receivable$9,600Decrease in inventory12,600Increase in prepaid rent2,600Decrease in salaries payable3,600Increase in accounts payable6,600Increase in income tax payable7,600 Required:Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash outflows and any decrease in cash as negative amounts.) SOFTWARE ASSOCIATESStatement of Cash Flows (partial)For the Year Ended December 31, 2021Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities $0

Answered: SOFTWARE ASSOCIATES Statement of Cash…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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		$670,000
Expenses:
Cost of goods sold	$400,000
Operating expenses	126,000
Depreciation expense	32,600
Income tax expense	47,000
Total expenses		605,600
Net income		$64,400

SOFTWARE ASSOCIATES
Selected Balance Sheet Data
December 31, 2021, compared to December 31, 2020
Decrease in accounts receivable	$9,600
Decrease in inventory	12,600
Increase in prepaid rent	2,600
Decrease in salaries payable	3,600
Increase in accounts payable	6,600
Increase in income tax payable	7,600

Required:

Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)

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

Adjustments to reconcile net income to net cash flows from operating activities:









Net cash flows from operating activities		$0

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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