Net Cash Flow from Operating Activities $($Indirect Method$)$

Lincoln Company owns no PP&E and reported the following income statement for the current year.

Sales$$3,500,000$Cost of goods sold$$2,125,000$Wages expense$550,000$Rent expense$190,000$Insurance expense$75,0002,940,000$Net income$$560,000$

Additional balance sheet information about the company follows:

End of YearBeginning of YearAccounts receivable$$280,000$$$240,000$Inventory$300,000330,000$Prepaid insurance$35,00025,000$Accounts payable$110,00090,000$Wages payable$55,00075,000$

Use the information to calculate the net cash flow from operating activities under the indirect method.

Cash from operating activitiesCurrent YearAccounts payableAccounts receivableCost of goods soldInsurance expenseInventoryNet cash flow from operating activitiesNet incomePrepaid insuranceRent expenseSalesWages expenseWages payable Answer $1$

Add $($Deduct$)$ reconciling items:Accounts payableAccounts receivableCost of goods soldInsurance expenseInventoryNet cash flow from operating activitiesNet incomePrepaid insuranceRent expenseSalesWages expenseWages payable Answer $2$

Accounts payableAccounts receivableCost of goods soldInsurance expenseInventoryNet cash flow from operating activitiesNet incomePrepaid insuranceRent expenseSalesWages expenseWages payable Answer $3$

Accounts payableAccounts receivableCost of goods soldInsurance expenseInventoryNet cash flow from operating activitiesNet incomePrepaid insuranceRent expenseSalesWages expenseWages payable Answer $4$

Accounts payableAccounts receivableCost of goods soldInsurance expenseInventoryNet cash flow from operating activitiesNet incomePrepaid insuranceRent expenseSalesWages expenseWages payable Answer $5$

Accounts payableAccounts receivableCost of goods soldInsurance expenseInventoryNet cash flow from operating activitiesNet incomePrepaid insuranceRent expenseSalesWages expenseWages payable Answer $6$