Fitzpatrick Company\'s calendar-year 2013 income statement shows the following:
ID: 2486476 • Letter: F
Question
Fitzpatrick Company's calendar-year 2013 income statement shows the following: Net Income. dollar 374,000; Depreciation Expense, dollar 44,000; Amortization Expense, dollar 7,200; Gain on Sale of Plant Assets. dollar 6,000. An examination of the company's current assets and current liabilities reveals the following changes (all from operating activities): Accounts Receivable decrease. dollar 17,100; Merchandise Inventory decrease, dollar 42,000; Prepaid Expenses increase. dollar 4,700; Accounts Payable decrease. dollar 8,200; Other Payables increase, dollar 1, 200. Use the indirect method to compute cash flow from operating activities. (Amounts to be deducted should be indicated with a minus sign.)Explanation / Answer
Net income $374,000
Add
Depreciation expense 44,000
Amortization expense 7,200
Account receivable decrease 17,100
Merchandise inventory decrease 42,000
Other payable increase 1,200
Less
Gain on sale of plant assets -6,000
Prepaid expense increase -4,700
Account payable decrease -8,200
Net cash flow from operating activity $466,600
Net income $374,000
Add
Depreciation expense 44,000
Amortization expense 7,200
Account receivable decrease 17,100
Merchandise inventory decrease 42,000
Other payable increase 1,200
Less
Gain on sale of plant assets -6,000
Prepaid expense increase -4,700
Account payable decrease -8,200
Net cash flow from operating activity $466,600
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