Chapter 21, Problem 21.17E

Indirect method; reconciliation of net income to net cash flows from operating activities

• LO21–4

The accounting records of EZ Company provided the data below. Prepare a reconciliation of net income to net cash flows from operating activities.

Net income	$50,000
Depreciation expense	7,000
Increase in inventory	1,500
Decrease in salaries payable	800
Decrease in accounts receivable	2,000
Amortization of patent	500
Amortization of premium on bonds	1,000
Increase in accounts payable	4,000
Cash dividends	12,000