Question

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

Net income	$	36,300
Depreciation expense		9,700
Increase in accounts receivable		5,900
Decrease in inventory		7,400
Decrease in prepaid insurance		2,150
Decrease in salaries payable		4,600
Increase in interest payable		1,550

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.)

Cash flows from operating activities:
Adjustments for noncash effects:
Changes in operating assets and liabilities:
Net cash flows from operating activities		$0

Answer 1

Cash flows from operating activities:
Net income		36,300
Adjustments for non cash effects:
Depreciation expense	9700
Changes in operating assets and liabilities:
Increase in accounts receivable	-5900
Decrease in inventory	7400
Decrease in prepaid insurance	2150
Decrease in salaries payable	-4600
Increase in interest payable	1550
		10300
Net cash flows from operating activities		$46,600

Net income to net cash flows from operating activities = $ 46,600

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