Sarasota Company\'s income statement for the year ended December 31, 2017, conta

Question

Sarasota Company's income statement for the year ended December 31, 2017, contained the following condensed infomation Service revenue Operating expenses (excluding depreciation) $621,000 Depreciation expense Loss on sale of equipment Income before income taxes Income tax expense Net income $849,000 60,000 27,000 708,000 141,000 40,000 $101,000 Sarasota's balance sheet contained the following comparative data at December 31 2017 2016 Accounts receivable Accounts payable Income taxes payable $36,000 43,000 4,100 $52,000 32,000 8,200 (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).)

Explanation / Answer

Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net income 101000 Adjustments to reconcile net income to Net cash provided by operating activities:         Depreciation expense 60000         Loss on sale of Equipment 27000         Decrease in accounts receivable 16000         Increase in accounts payable 11000         Decrease in income taxes payable -4100 109900         Net cash provided by operating activities 210900

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