The following information is available for Cornelius Inc Selected Income Statement Information Amount Net income $52,000 Depreciation expense 11,300 Selected Balance Sheet Information Beginning Balance Ending Balance Accounts receivable $11,500 $17,650 Inventory 33,800 27,825 Accounts payable 15,90...

1 Cash flows from operating activities 52000 Net income Adjustments to reconcile net income to net c ...

The following information is available for Cornelius Inc.: Selected Income Statement Information ____________ Amount Net income ....................................................

Question:

The following information is available for Cornelius Inc.:
Selected Income Statement Information ____________ Amount
Net income .................................................... $52,000
Depreciation expense ......................................... 11,300
Selected Information _______ Beginning Balance ______ Ending Balance
Accounts receivable ..................................... $11,500 ................. $17,650
Inventory ................................................... 33,800 .................. 27,825
Accounts payable ......................................... 15,900 ................... 24,600
Required:
1. Compute the net cash flows from operating activities using the indirect method.
2. Explain why Cornelius was able to report net cash flow from operating activities that was higher than net income.
3. What could the difference between net income and cash flow from operating activities signal to financial statement users?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...