Wilma Corporation prepares its statement of cash flows using the indirect method

Question

Wilma Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2014 fiscal year was $641,000. Depreciation and amortization expense of $67,000 and $37,000 respectively were included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: Decrease in accounts receivable $29,000 Increase in inventories 10,100 Increase prepaid expenses 9,600 Increase in salaries payable 11,100 Decrease in income taxes payable 15,100 Determine the net cash flow provided (used) by operating activities.

Explanation / Answer

Cash flows from operating activities: Net income fr the year 641000 Adjustment for reconciliation Depreciation expense 67000 Amortization expense 37000 Decrease in Accounts receivable 29000 Increase in inventries -10100 Increasse in prepaid expense -9600 Increasse in Salaries payable 11100 Decrease in Income tax payable -15100 Net cash provided from operating activities 750300

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