Budget Auto Parts Company uses the indirect method to prepare the statement of cash flows. Refer to
Question:
Budget Auto Parts Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement:
Budget Company
Income Statement
Year Ended December 31, 2017
Sales Revenue $360,000
Interest Revenue 1,500
Gain on Sale of Plant Assets 6,000
Total Revenues and Gains $367,500
Cost of Goods Sold 165,000
Salary Expense 67,500
Depreciation Expense 18,000
Other Operating Expenses 34,500
Interest Expense 1,500
Income Tax Expense 7,500
Total Expenses 294,000
Net Income (Loss) $73,500
Additional information provided by the company includes the following:
Current assets other than cash increase by $36,000.
Current liabilities decrease by $1,500.
Prepare the operating activities section of the statement of cash flows.
Cash Flows from Operating Activities:
Net Income $xx
Adjustments to Net Income:
Depreciation Expense xx
Gain on Disposal of Plant Assets (xx)
Increase in Current Assets (xx)
Decrease in Current Liabilities (xx) (xx)
Net Cash Provided by Operating Activities $xx
Expert Answer:
Financial Accounting
ISBN: 978-0133427530
10th edition
Authors: Walter Harrison, Charles Horngren, William Thomas
