The yellow cells are where each answer goes. INNOVATION ELECTRONICS, INC. Income Statement For the Year Ended December $31,20$X$2$ Net sales $ $2,430,000$

Gain on sale of land $6,500$

Total revenues $2,436,500$

Expenses:

Cost of goods sold $ $1,565,000$

Operating expenses $598,000$

Depreciation expense $16,000$

Interest expense $17,000$

Income tax expense $63,000$

Total expenses $2,259,000$

Net income $

$/$r$/$n$/$r$/$n Required: Complete the statement of cash flows $($indirect method$)$ shown below by using formulas that reference data from the income statement and balance sheet $($found by clicking the tabs at the bottom of this worksheet. Note: Blank cells may be included in calculations. INNOVATION ELECTRONICS, INC. Statement of Cash Flows For the Year Ended December $31,20$X$2$ Cash Flows from Operating Activities:

Net income $ $177,500$

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation expense $16,000$

Gain $($on sale of land$)$

Changes in current assets and current liabilities:

Accounts receivable $14,300$

Inventory $(6,500)$

Prepaid insurance $1,580$

Accounts payable $(54,500)$

Interest payable $1,100$

Income tax payable $(2,300)$

Net cash provided by $($used in$)$ operating activities

$/$r$/$n

Answer rating: 100% (QA)

To construct the Statement of Cash Flows using the indirect method we start with net income and make ... View the full answer