Able Company completed its income statement and balance sheet for 2010 and provided the following information:

In addition, Able bought a small service machine for $5,000.

Required:
1. Present the operating activities section of the statement of cash flows for Able Company using the indirect method.
2. What were the major reasons that Able was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and net income important to financialanalysts?

Transcribed Image Text:

Income Statement Service revenue Expenses $51,000 Salaries Depreciation Amortization of copyrights Other expenses $41,000 5,000 200 8,700 54,900 Net loss $ 3,900) Partial Balance Sheet Accounts receivable Salaries payable 2009 S 8,000 $25,000 14,000 1000 1,000 5,100 2010 5 Other accrued liabilities