Software distributors reports net income of $65,000. included in that number is depreciation expense of $15,000 and a loss on the sale of land of $6,000. a comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $28,000, a decrease in inventory of $37,000, and an increase in accounts payable of $45,000.
Answers
cash generated from operating activities 196,000
Explanation:
We have to detemrinate the cash generated from operating activities using indirect method:
net income 65,000
non-monetary adjustment
depreciation expense 15,000
loss on sale of land 6,000
adjusted income 86,000
changes in working capital*
A/R decrease 28,000
Inventory decrease 37,000
increase in A/P 45,000
net change 110,000
cash generated from operating activities 196,000
*decrease in assets represent were converted int cash
while increase of liabilities represent the delayment of cash outlay
you're crazy if you think that someone is going to write a 500 word report for you.
income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.
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