Exercise 16-4 Indirect: Cash flows from operating activities LO P2

The following income statement and information about changes in noncash current assets and current liabilities are reported.

SONAD COMPANY Income Statement For Year Ended December 31, 2017
Sales				$	1,858,000
Cost of goods sold					910,420
Gross profit					947,580
Operating expenses
Salaries expense	$	254,546
Depreciation expense		44,592
Rent expense		50,166
Amortization expensesPatents		5,574
Utilities expense		20,438			375,316
					572,264
Gain on sale of equipment					7,432
Net income				$	579,696

Changes in current asset and current liability accounts for the year that relate to operations follow.

Accounts receivable	$	47,700		increase		Accounts payable	$	13,550		decrease
Inventory		15,650		increase		Salaries payable		3,500		decrease

Required:

Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Statement of Cash Flows (partial)
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities