The following income statement and information about changes in noncash current
ID: 2596567 • Letter: T
Question
The following income statement and information about changes in noncash current assets and current liabilities are reported.
Required:
Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
SONAD COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $1,614,000 790,860 823,140 Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense $221,118 38,736 43,578 4,842 17,754 326,028 497,112 6,456 $ 503,568 Gain on sale of equipment Net income Changes in current asset and current liability accounts for the year that relate to operations follow Accounts receivable Inventory $22,250 increase Accounts payable 29,300 increase Salaries payable $13,675 decrease 2,100 decreaseExplanation / Answer
Statement of Cash Flows (partial) Cash flows from operating activities Net income 503568 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 38,736 Amortization expense—Patents 4,842 Gain on sale of equipment -6,456 Changes in current operating assets and liabilities Increase in accounts receivable -22,250 Increase in inventory -29,300 Decrease in accounts payable -13,675 Decrease in salaries payable -2,100 Net cash provided by operating activities 4,73,365
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