Question 4.

PART 1

PART 2

Cash Flows from Operating Activities-Indirect Method Staley Inc. reported the following data: Net income $345,600 Depreciation expense 70,500 Loss on disposal of equipment 25,600 Increase in accounts receivable 29,100 Increase in accounts payable 12,600 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Staley Inc. Statement of Cash Flows (partial) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Loss on disposal of equipment 0 00 00 Changes in current operating assets and liabilities: Increase in accounts receivable Increase in accounts payable Net cash flow from operating activities o Changes in Current Operating Assets and Liabilities,Indirect Method Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 2041 Accounts receivable $26,000 $25,100 Inventory 73,700 74,400 Accounts payable 28,600 27,000 Dividends payable 20,000 22,000 Adjust net income of $100,000 for changes in operating assets and liabilities to arrive at net cash flow from operating activities