Suppose your company reports $185 of net income and $45 of cash dividends paid,

Question

Suppose your company reports $185 of net income and $45 of cash dividends paid, and its comparative balance sheet indicates the following Beginning Ending $ 40 Cash Accounts Receivable Inventory 100 270 $410 $230 200 160 Tota $590 Common Stock Retained Earnings Salaries and Wages Payable S 15S 75 105 410 125 270 Total $410 $590 Required: 1. Prepare the operating activities section of the statement of cash flows, using the indirect method (Amounts to be deducted should be indicated with a minus sign.) Net Income Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable Dividends paid Net Cash Flow from Operating Activities

Explanation / Answer

Net income 185 Increase in Accounts Receivables(200-100) -100 Decrease in Inventory(270-160) 110 Increase in salaies and wages payables(75-15) 60 Dividends paid -45 Net cash flow from operating activities $210.

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