Prepare the Cash Flows from the Operating Activities section of the statement of cash flows, using the
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Question:
Prepare the Cash Flows from the Operating Activities section of the statement of cash flows, using the indirect method.
The income statement disclosed the following items for 2015:
Depreciation expense | $36,000 |
Gain on disposal of equipment | 21,000 |
Net income | $265,500 |
Balances of the current assets and current liabilities account changed between December 31, 2014, and December 31, 2015, as follows:
Increase in accounts receivable | $6,800 |
Decrease in inventory | 3,200 |
Increase in prepaid insurance | 1,200 |
Decrease in account payable | 3,800 |
Increase in income taxes payable | 1,200 |
Increase in dividends payable | 850 |
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