Question

Cash Flows from Operating Activities—Indirect Method

Staley Inc. reported the following data:

Net income

$413,900

Depreciation expense

53,800

Loss on disposal of equipment

28,300

Increase in accounts receivable

27,900

Increase in accounts payable

11,300

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

$

Answer 1

Cash flows from operating activities:	($)
Net income	413,900
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	53,800
Loss on disposal of equipment	28,300
Changes in current operating assets and liabilities:
Increase in accounts receivable	-$27,900
Increase in accounts payable	11,300
Net cash flow from operating activities	479,400

Net cash provided by operating activities = $479,400.