Windsor, Inc.’s income statement contained the condensed information below. Wind

Question

Windsor, Inc.’s income statement contained the condensed information below. Windsor, Inc. Income Statement For the Year Ended December 31, 2017 Service revenue $2,783,900 Operating expenses, excluding depreciation $1,762,180 Depreciation expense 157,850 Loss on disposal of plant assets 45,920 1,965,950 Income before income taxes 817,950 Income tax expense 160,720 Net income $657,230 Windsor, Inc.’s balance sheet contained the comparative data at December 31. 2017 2016 Accounts receivable $200,900 $172,200 Accounts payable 117,670 91,840 Income taxes payable 37,310 20,090 Accounts payable pertain to operating expenses. Prepare the operating activities section of the statement of cash flows using the indirect method.

Explanation / Answer

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

Cash flow from operating activities Net income 657230 Adjustment to reconcile net income Loss on disposal of plant assets 45920 Depreciation expenses 157850 Increase account receivable (28700) Increase account payable 25830 Increase income tax payable 17220 Net cash flow from operating activities 875350

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