Determining Net Cash Flow from Operating Activities: BurchCompany reported the following items in its balance sheet andincome statement: increase in cash account, $20,000; increase inaccounts receivable, $5,000; increase in inventory, $20,000;increase in accounts payable, $10,000; decrease in income taxespayable, $1,000; net income, $70,000; depreciation expense,$25,000. Required: Compute the net cash flows from operatingactivities using the indirect method.
Determining Net Cash Flow from Operating Activities: BurchCompany reported the following items in its balance sheet andincome statement: increase in cash account, $20,000; increase inaccounts receivable, $5,000; increase in inventory, $20,000;increase in accounts payable, $10,000; decrease in income taxespayable, $1,000; net income, $70,000; depreciation expense,$25,000. Required: Compute the net cash flows from operatingactivities using the indirect method.
Related questions
Preppare the Cash Flows from Operating Activites section of thestatement of cash flows, using the indirect method.
The income statement disclosed the following items for 2016:
| Depreciation expense | $24,000 |
| Gain on disposal of equipment | $16,000 |
| Net income | $38,000 |
Changes in current assets and current liabilities betweenDecember 31, 2015 and December 31, 2016, are as follows:
| Increase in accounts receivable | $20,000 |
| Decrease in inventory | 14,000 |
| Increase in prepaid insurance | 2,000 |
| Decrease in accounts payable | 5,000 |
| Decrease in interest payable | 1,000 |
| Increase in incomes taxes payable | 10,000 |
Statement of Cash Flows
| Cash from Operating Activites | |
