Preparing the Operating Activities Section The data below were provided by the accounting records of Franklin Company.
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Question:
Preparing the Operating Activities Section
The data below were provided by the accounting records of Franklin Company.
Net income (accrual basis) | $32,000 |
Depreciation expense | 6,400 |
Decrease in salaries payable | 960 |
Decrease in trade accounts receivable | 1,440 |
Increase in merchandise inventory | 2,000 |
Amortization of patent | 80 |
Increase in long-term liabilities | 8,000 |
Sale of capital stock for cash | 20,000 |
Amortization of premium on bonds payable | 160 |
Accounts payable increase | 3,200 |
Stock dividend issued | 8,000 |
Required
Prepare the reconciliation of net income with cash flow from operations for inclusion in the statement of cash flows (indirect method).
Note: If an item is not included in the operating activities section, leave the answer blank (zero).
Cash flows from Operating Activities | |
---|---|
Net income | |
Adjustments: | |
Depreciation expense | |
Amortization expensepatent | |
Amortization of premium on bonds payable | |
Decrease in accounts receivable | |
Increase in merchandise inventory | |
Increase in accounts payable | |
Increase in long-term liabilities | |
Decrease in salaries payable | |
Sale of capital stock for cash | |
Stock dividend issued | |
Net cash provided (used) by operating activities |
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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