The following income statement and information about changes in noncash current

Question

The following income statement and information about changes in noncash current assets and current liabilities are reported SONAD COMPANY Income Statement For Year Ended December 31, 2016 Sales Cost of goods sold Gross profit Operating expenses $ 2,044,000 1,001,560 1,042,440 Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $280,028 49,056 55,188 6,132 22,484 412,888 629,552 8,176 $ 637,728 Gain on sale of equipment Net income Changes in current asset and current liability accounts for the year that relate to operations follovw. Accounts receivable Inventory $30,350 increase 32,325 increase Accounts payable Salaries payable $11,450 decrease 1,650 decrease

Explanation / Answer

Cash flows from operating activities Net income 637728 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 49,056 Amortization expense—Patents 6,132 Gain on sale of equipment -8,176 Changes in current operating assets and liabilities Increase in accounts receivable -30,350 Increase in inventory -32,325 Decrease in accounts payable -11,450 Decrease in salaries payable -1,650 Net cash provided by operating activities 608965

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