Question

LO 14-1 Exercise 14-3A Use the indirect method to determine cash flows from operating activities Shim Company presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Shim's 2017 and 2016 year-end balance sheets: Account Title 2017 $36,000 2,400 600 9.300 4.500 3,600 2016 Accounts receivable Prepaid rent Interest receivable Accounts payable Salaries payable Unearned revenue $37,200 1,800 400 10,400 5,200 5.400 The income statement reported a $1,500 gain on the sale of equipment, an the sale of land, and $3,600 of depreciation expense. Net income for the period was $47,300. $800 loss on Required Prepare the operating activities section of the statement of cash flows

Answer 1

Answer:

Shim Company
Statement of cash flow-Indirect Method
	Amount($)	Amount($)
cash flow from operating activity
Net Income		$47,300
adjustment to reconcile net income to net cash flow from operating activity
Gain on sale of equipment	-1,500
loss on sale of land	800
Depreciation	3,600
Change in Operating Assets and Labilities
Decrease in receivable(37,200-36,000)	1,200
Increase in prepaid rent(1,800-2,400)	-600
Increase in interest receivable(400-600)	-200
decrease in payable(10,400-9,300)	-1,100
decrease in salaries payable(5,200-4,500)	-700
decrease in unearned revenue(5,400-3,600)	-1,800	$ -300
Net cash flow from operating activity		$47,000