From the following calculate the net cash flows from operati

From the following, calculate the net cash flows from operating activities (use the indirect method):

2011

2012

Accounts Receivable

$5,800

$7,500

Prepaid Insurance

950

830

Accounts Payable

5,500

6,200

Salaries Payable

1,250

2,650

For the year ended 2007:

Net Income:

$17,900

Depreciation Expense

4,800

	2011	2012
Accounts Receivable	$5,800	$7,500
Prepaid Insurance	950	830
Accounts Payable	5,500	6,200
Salaries Payable	1,250	2,650
For the year ended 2007:
Net Income:	$17,900
Depreciation Expense	4,800

Solution

Net income 17900 Add:Depreciation 4800 Less:increase in AR(7500-5800) (1700) Add:decrease in prepaid expense(950-830) 120 Add\"increase in AP(6200-5500) 700 Add:increase in salary payable(2650-1250) 1400 Net cash from operating activities $23220.