Question

Arundel Company disclosed the following Information for its recent calendar year. $110,eee Income Statement Data Revenues Expenses: Salaries expense Utilities expense Depreciation expense Other expenses Net loss Selected Year-End Balance Sheet Data Accounts receivable decrease $29, Purchased a machine for cash 20,000 salaries payable increase 27,eee other accrued liabilities decrease 13,eee 74,000 30,eee 32,400 8,600 $(35,eee) Prepare the operating activities section of the statement of cash flows using the indirect method. (Any loss or amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities $ 0

Answer 1

Statements of Cash Flows (Partial) Particulars Amount Cash flows from Operating activities: Net Income (35,000) Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense 32,400 Accounts receivable decrease Salaries payable increase Other accured liabilities decrease Net Cash flow from Operating activities 29,000 27,000 (13,000) 40,400 Increase in current assets and decrease in current liabilities results in cash outflow - (negative) - Decrease in current assets and Increase in current liabilities results in cash inflow - positive Purchase of machine is a financing activity and not operating activity. Hence, not considered