Kennedy, Inc. reported the following data: Amount Descriptions Statement of Cash

Question

Kennedy, Inc. reported the following data:

Amount Descriptions

Statement of Cash Flows-Operating Activities

Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required.

Statement of Cash Flows (partial)

1

Cash flows from operating activities:

2

3

Adjustments to reconcile net income to net cash flow from operating activities:

4

5

6

7

Changes in current operating assets and liabilities:

8

9

10

Net income $153,754 Depreciation expense 12,016 Loss on disposal of equipment 8,751 Gain on sale of building 21,362 Increase in accounts receivable 8,330 Decrease in accounts payable 3,325

Explanation / Answer

Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Cash flows from operating activities: Net income 153754 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense 12016 Loss on disposal of equipment 8751 Gain on sale of building -21362 Changes in current operating assets and liabilities: Increase in accounts receivable -8330 Decrease in accounts payable -3325 Net cash flow from operating activities 141504

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