Exercise 23-6 Sheffield Company’s income statement for the year ended December 3
ID: 2597980 • Letter: E
Question
Exercise 23-6
Sheffield Company’s income statement for the year ended December 31, 2017, contained the following condensed information.
$834,000
$621,000
60,000
26,000
707,000
127,000
41,000
$86,000
Sheffield’s balance sheet contained the following comparative data at December 31.
2017
2016
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
Service revenue$834,000
Operating expenses (excluding depreciation)$621,000
Depreciation expense60,000
Loss on sale of equipment26,000
707,000
Income before income taxes127,000
Income tax expense41,000
Net income$86,000
Explanation / Answer
Answer:
Sheiffiled Corporation
Cash Flow statement
Cash Flows from Operating Activities:
Amount $
Amount $
Net Income
86000
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation Expense—Plant Assets
60000
Loss on sale of equipmet
26000
Decrease in Accounts Receivable
17000
Increase in Accounts Payable
10000
Decrease in Tax Liabilities
-4500
113000
Net Cash Provided by Operating Activities
199000
Sheiffiled Corporation
Cash Flow statement
Cash Flows from Operating Activities:
Amount $
Amount $
Net Income
86000
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation Expense—Plant Assets
60000
Loss on sale of equipmet
26000
Decrease in Accounts Receivable
17000
Increase in Accounts Payable
10000
Decrease in Tax Liabilities
-4500
113000
Net Cash Provided by Operating Activities
199000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.