Question

Below are the current asset and current liability sections of Slinzer, Inc. for 2020 and 2019:

	2020		2019
Current Assets:
Cash	$ 10,000		$ 2,000
Accounts Receivable	16,000		20,000
Supplies	7,000		6,000
Current Liabilities:
Accounts Payable	5,600		4,500
Dividends Payable	1,000		2,500

Slinzer, Inc. reported net income of $25,000 for 2020, gain on the sale of equipment $3,200, and Depreciation Expense of $6,000.

Instructions

Prepare the Operating Activities section of the calendar year 2020 Statement of Cash Flows for Slinzer Inc. using the indirect method

Answer 1

Operating activities section of cash flow statement using indirect method :-

Particulars	Amount ($)
Net income	25000
Add :- deprecition	6000
Add :- decrease in accounts receivable	4000
Add :- decrease in dividend payable	1500
Less :- gain on sale of equipment	(3200)
Less :- increase in cash	(8000)
Less :- increase in supplies	(1000)
Less :- increase in accounts payable	(1100)
Net cash flows from operating activities	23200

Net cash flows from operating activities = $23200

These are all the calculations required to solve the above given question.

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