The income statement disclosed the following items for the year: Line Item Description Amount Depreciation expense $43,900 Gain on disposal of equipment 25,610 Net income 292,200 The changes in the current asset and liability accounts for the year are as follows: Line Item Description Increase (Decrease) Accounts receivable $6,840 Inventory (3,890) Prepaid insurance (1,460) Accounts payable (4,640) Income taxes payable 1,460 Dividends payable 1,020 Question Content Area 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 out flows, cash payments, decreases in cash, or any negative adjustments. blankStatement of Cash Flows (partial) Line Item Description Amount Amount Cash flows from (used for) operatingactivities: $Net income Adjustments to reconcile net incometo net cash flows from (used for) operating activities: Depreciation Gain on disposal of equipment Changes in current operating assetsand 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

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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Line Item Description	Amount
Depreciation expense	$43,900
Gain on disposal of equipment	25,610
Net income	292,200

Line Item Description	Increase (Decrease)
Accounts receivable	$6,840
Inventory	(3,890)
Prepaid insurance	(1,460)
Accounts payable	(4,640)
Income taxes payable	1,460
Dividends payable	1,020

Question Content Area

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 out flows, cash payments, decreases in cash, or any negative adjustments.

blankStatement of Cash Flows (partial)

Line Item Description	Amount	Amount
Cash flows from (used for) operatingactivities:
	$Net income
Adjustments to reconcile net incometo net cash flows from (used for) operating activities:
	Depreciation
	Gain on disposal of equipment
Changes in current operating assetsand 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