Question

The accounting records of Hampton Company provided the data below ($ in 000s).

Net income	$	19,300
Depreciation expense		8,000
Increase in accounts receivable		4,200
Decrease in inventory		5,700
Decrease in prepaid insurance		1,300
Decrease in salaries payable		2,900
Increase in interest payable		700

Required:
Prepare a reconciliation of net income to net cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)
  

Answer 1

Sloution:

Reconciliation of net income to Net cash flows from Operating activities
Particulars	Details	Amounts
Net Income		$19,300.00
Adjustments:
Depreciatiomn Expense	$8,000.00
Increase in Accounts Receivable	-$4,200.00
Decrease in inventory	$5,700.00
Decrease in prepaid insurance	$1,300.00
Decrease in salaries payable	-$2,900.00
Increase in interest payable	$700.00
Total Adjustment		$8,600.00
Net Cash Flow from Operating Activities		$27,900.00