New Vision Company completed its income statement and balance sheet for 2011 and

Question

New Vision Company completed its income statement and balance sheet for 2011 and provided the following information:

Service revenue                                                               $66,000
Expenses:
    Salaries                                              $42,000
    Depreciation                                        $7,300
    Utilities                                               $7,000
    Loss on sale of equipment                     $1,700             $58,000
Net Income                                                                      $8,000

Partial Balance Sheet                                  2011                2010

Accounts receivable                                $12,000               $24,000
Salaries payable                                      $19,000               $10,000
Other accrued liabilities                           $5,000                $9,000
Land                                                       $52,000              $57,000

Required:
Present the operating activities section of the statement of cash flows for New Vision Company using the indirect method.

Explanation / Answer

Net Income $8,000 Adjustments: Depreciation $7,300 Loss on sale of equipment $1,700 Decrease in Accounts receivable $12,000 Increase in Salary payable $9,000 Decrease in accrued liabilities ($4,000) $26,000 $34,000 ======

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