Question

Zumbrunn Company’s income statement contained the following condensed information.

ZUMBRUNN COMPANY Income Statement For the Year Ended December 31, 2020
Service revenue				$971,500
Operating expenses, excluding depreciation		$624,100
Depreciation expense		54,900
Loss on disposal of plant assets		25,600		704,600
Income before income taxes				266,900
Income tax expense				39,900
Net income				$227,000

Zumbrunn’s balance sheets contained the comparative data at December 31, shown below.

		2020		2019
Accounts receivable		$75,500		$61,000
Accounts payable		41,100		28,900
Income taxes payable		11,600		6,400

Accounts payable pertain to operating expenses.

Prepare the operating activities section of the statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

ZUMBRUNN COMPANY Partial Statement of Cash Flows                                                           For the Year Ended December 31, 2020For the Month Ended December 31, 2020December 31, 2020
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Net IncomeDepreciation ExpenseLoss on Sale of EquipmentIncrease in Accounts PayableDecrease in Accounts PayableIncrease in Income Taxes PayableDecrease in Income Taxes PayableIncrease in Accounts ReceivableDecrease in Accounts ReceivableCash Receipts from CustomersFor Operating ExpensesFor Income Taxes		$
AddLess cash payments:
Net IncomeDepreciation ExpenseLoss on Disposal of EquipmentIncrease in Accounts PayableDecrease in Accounts PayableIncrease in Income Taxes PayableDecrease in Income Taxes PayableIncrease in Accounts ReceivableDecrease in Accounts ReceivableCash Receipts from CustomersFor Operating ExpensesFor Income Taxes	$
Net IncomeDepreciation ExpenseLoss on Disposal of EquipmentIncrease in Accounts PayableDecrease in Accounts PayableIncrease in Income Taxes PayableDecrease in Income Taxes PayableIncrease in Accounts ReceivableDecrease in Accounts ReceivableCash Receipts from CustomersFor Operating ExpensesFor Income Taxes
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash		$

Answer 1

Answer is given below