Question

1.

Cash Flows from Operating Activities—Indirect Method

Staley Inc. reported the following data:

Net income	$283,600
Depreciation expense	61,800
Loss on disposal of equipment	25,900
Increase in accounts receivable	18,000
Increase in accounts payable	11,800

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Staley Inc.
Statement of Cash Flows (partial)
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$

2.

Land Transactions on the Statement of Cash Flows

Alpha Corporation purchased land for $488,000. Later in the year, the company sold a different piece of land with a book value of $210,000 for $231,000.

How are the effects of these transactions reported on the statement of cash flows? Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank.

Transactions	Action	Amount
Gain or loss on sale of land		$
Cash received from sale of land		$
Cash paid for purchase of land		$

Answer 1