Net income of Mansfield Company was $50,000. The accounting records reveal depre

ID: 2334799 • Letter: N

Question

Net income of Mansfield Company was $50,000. The accounting records reveal depreciation expense of $85,000 as well as increases in prepaid rent, salaries payable, and income taxes payable of $65,000, $28,000, and $25,000, respectively. Prepare the cash flows from operating activities section of Mansfield's statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities: Adjustments for noncash effects Changes in operating assets and liabilities: Net cash inflows from operating activities

Explanation / Answer

Answer:

Amount $

Cash Flow from operating activities:

Net Income

50,000

Adjustments for non cash effects:

Depreciation expense

85000

Changes in Operating assets and liabilities:

Increase in Prepaid rent

-65000

Increase in Salaries Payable

28000

Increase income tax payable

25000

Net Cash flow from operating activities

123,000