Question

GJ Company, a manufacturer, has provided the following information pertaining to its recent year of operation: Net income, $480,000 Accounts payable decreased $40,000 Prepaid assets increased $29,000 Depreciation expense was $51,000 Accounts receivable decreased $39,000 Loss on sale of a depreciable asset was $29,000 Wages payable increased $25,000 Unearned revenue decreased $29,000 Patent amortization expense was $11,000 Using the indirect method, how much was GJ's net cash provided by operating activities

Answer 1

Answer:

                                   GJ Company

              Cash Flow From Operating Activity  

Net Income                                                 $480,000

Add: Depreciation Expenses                     $51,000

Add: Patent Amortization Expenses          $11,000

Increase in Current Liability and

decrease in current asset

Accounts receivable decreased               $40,000

Wages Payable Increased                         $25,000

Unearned Revenue decreased                 $29,000

Decrease in Current Liability

and Increase in current asset

Prepaid asset increased                            ($29,000)

Accounts Payable Decreased                   ($40,000)

Add: Loss on sale of asset                         $29,000

Cash Flow From Operating Activity        $596,000