Question

Staley Inc. reported the following data:

Net income	$297,200
Depreciation expense	60,200
Loss on disposal of equipment	24,500
Increase in accounts receivable	20,500
Increase in accounts payable	10,500

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 out flows, cash payments, decreases in cash, or any negative adjustments.

Answer 1

Cash flows from operating activities
Net Income		$ 297,200
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$   60,200
Loss on disposal of equipment	$   24,500
Changes in current operating assets and liabilities
Increase in accounts receivable	$ (20,500)
Increase in accounts payable	$   10,500
		$    74,700
Net cash provided by operating activities		$ 371,900