Question

Salud Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2017. (Amounts to be deducted should be indicated with a minus sign.)

Selected 2017 Income Statement Data Selected Year-End 2017 Balance Sheet Data
Net income $ 440,000 Accounts receivable increase $ 47,600
Depreciation expense 84,500 Prepaid expenses decrease 16,800
Gain on sale of machinery 25,100 Accounts payable increase 6,200
Wages payable decrease 2,900
Cash flows from operating activities
Adjustments to reconcile net income to operating cash flow
$
0
$0

Answer 1

Answer:

Salud's cash flows from operating activities is $471,900.

Explanation:

Salud Company

Cash flows from operating activities

Adjustments to reconcile net income to operating cash flow

Net income                                                      $440,000

Add: Depreciation expense                               84,500

Less: Gain on sale of machinery                       (25,100)

Less: Accounts receivable increase                 (47,600)

Add: Prepaid expenses decrease                      16,800

Add:  Accounts payable increase                        6,200

Less: Wages payable decrease                         (2,900)

Net cash flows from operating activities    $471,900