Question

Staley Inc. reported the following data:

Net income	$488,200
Depreciation expense	54,800
Loss on disposal of equipment	30,900
Increase in accounts receivable	10,800
Increase in accounts payable	11,900

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.

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

Staley Inc.
Statement of Cash Flows (partial)
Cash flows from operating activities:
Net Income		$488,200
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$54,800
Loss on disposal of equipment	$30,900
Changes in current operating assets and liabilities:
Increase in accounts receivables	($10,800)
Increase in accounts payable	$11,900	$86,800
Net cash flow from operating activities		$575,000

No.	Conceptual Notes
1	Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2	Effects of Non - Cash Transaction are adjusted from Net Income.
3	Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4	Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5	Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income