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The accounting records of EZ Company provided the data below. Net income $ 55,700 Depreciation expense...

The accounting records of EZ Company provided the data below.

Net income $ 55,700

Depreciation expense 9,700

Increase in inventory 2,850

Decrease in salaries payable 1,910

Decrease in accounts receivable 3,800

Amortization of patent 710

Amortization of premium on bonds 3,370

Increase in accounts payable 6,700

Cash dividends 15,000

Prepare a reconciliation of net income to net cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.)

Cash flows from operating activities:

Adjustments for noncash effects:

Changes in operating assets and liabilities:

Net cash flows from operating activities

Business   Accounting   
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Answer #1
Cash flow from operating activities:
Net income $ 55,700
Adjustments for non cash effects:
Add: Depreciation expense $ 9,700
Add: Amortization of patent (intangible asset) $ 710
Less: Amortization of premium on bonds -$ 3,370
Change in current operating assets and liabilities:
Less: Increase in inventory -$ 2,850
Add: Decrease in accounts receivable $ 3,800
Less: Decrease in salaries payable -$ 1,910
Add: Increase in accounts payable $ 6,700
         Net cash flow from operating activities $ 68,480

Note: Cash dividend does not affect cash flow from operating activities.  

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