Question 1 The following balances were gathered from Newport Industries general

Question

Question 1 The following balances were gathered from Newport Industries general ledger. December 31, 2014 December 31, 2015 Accounts receivable $67,890 $62,830 Inventory 137,470 144,250 Accounts payable 30,770 41,860 Accrued liabilities 11,950 9,610 Sales 323,840 Cost of goods sold 139,790 Operating expenses (includes $7,310 depreciation) 70,980 Loss on sale of land 5,940 Income tax expense 21,730 Using the indirect method, prepare the cash flows provided by operating activities section of Newport’s statement of cash flows. (Enter amounts that decrease cash using either a negative sign preceding the number e.g. -4,527 or parentheses e.g. (4,527).) Newport Industries Statement of Cash Flows (Partial) $ $

Explanation / Answer

**net income =sales -all expense

= 323840-139790-70980-5940-21730=85400

cash Flow statement (Partial) cash flow from operating activity Net income 85400 adjustment to reconcile net income to net cash flow from operating activity depreciation 7310 loss on sale of land 5940 decrease in receivable [67890-62830] 5060 Increase in inventory [144250-137470] (6780) Increase in payable [30770-41860] 11090 decrease in accrued liabilities [11950--9610] (2340) 20280 net cash provided by operating activity 105680

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