Zumbrunn Company\'s income statement contained the condensed information below Z

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Zumbrunn Company's income statement contained the condensed information below ZUMBRUNN COMPANY Income Statement For the Year Ended December 31, 2015 $971,240 Service revenue Operating expenses, excluding depreciation Depreciation expense Loss on disposal of equipment Income before income taxes Income tax expense Net income $623,470 60,800 15,290 699,560 271,680 40,760 $230,920 Zumbrunn's balance sheet contained the comparative data at December 31, shown below Accounts receivable Accounts payable Income taxes payable 2015 $74,100 40,620 11,120 201 $59,700 28,810 7,270 Accounts payable pertain to operating expenses Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a sign e.g. -15,000 or in parenthesis e.g. (15,000).) ZUMBRUNN COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2015 Adjustments to reconcile net income to

Explanation / Answer

Operating activities section :

Cash flow from operating activities Net income 230920 Adjustment to reconcile net income to Cash flow from operating activities Depreciation expense 60800 Loss on disposal of equipment 15290 Increase account receivable -14400 Increase account payable 11810 Increase income tax payable 3850 77350 Net cash flow from operating activities 308270

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