Using the concepts from above, determine the cash flow from operating activities

Question

Using the concepts from above, determine the cash flow from operating activities using the indirect method. The following information is available from current period financial statements: Net Income $527,000 Increase in A/Receivable $16,000 Patent Amortization 42,000 Increase in A/Payable 32,000 The following information is available from current period financial statements: Net Income $120,000 Decrease in Inventory $27,000 Depreciation Expense 82,000 Amortization of Premium on Bond Payable 1,200 The following information is available from current period financial statements: Net Income $640,000 Decrease in Taxes Payable $80,000 Unrealized gain on Decrease in Prepaid Trading Securities 12,000 Insurance 6,500 The following information is available from current period financial statements: Net Income $142,000 Increase in wages payable $56,000 Decrease in interest Decrease in Dividends payable 6,000 receivable 18,000

Explanation / Answer

Case 1. Net income 527000 Patent amortization 42000 Increase in Accounts Receivable -16000 Increase in Acoounts Payable 32000 Net cash flow from (used in) operating activities 585000 Case 2. Net income 120000 Depreciation Expense 85000 Decrease in inventory 27000 Amortization of bond premium 1200 Net cash flow from (used in) operating activities 233200 Case 3. Net income 640000 Decrease in taxes payable -80000 Unrealized gain -12000 Decrease in prepaid insurance 6500 Net cash flow from (used in) operating activities 554500 Case 4. Net income 142000 Increase in wages payable 56000 Decrease in Interest receivable 18000 Decrease in dividends payable -6000 Net cash flow from (used in) operating activities 210000

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