The income statement disclosed the following items for year:

Depreciation expense	$56,800
Gain on disposal of equipment	33,110
Net income	452,600

The changes in the current asset and liability accounts for the year are as follows:

Increase (Decrease)
Accounts receivable	$8,840
Inventory	(5,030)
Prepaid insurance	(1,890)
Accounts payable	(5,990)
Income taxes payable	1,890
Dividends payable	1,320

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Cash flows from operating activities:
Net income	$
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation
Gain on disposal of equipment
Changes in current operating assets and liabilities:
Increase in accounts receivable
Decrease in inventory
Decrease in prepaid insurance
Decrease in accounts payable
Increase in income taxes payable
Net cash flow from operating activities

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Answer rating: 100% (QA)

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