Using a Spreadsheet that Calculates Cash Flows from Operatin

Using a Spreadsheet that Calculates Cash Flows from Operating Activities (Indirect Method)

Small Business Client Balance Sheet At December 31 Small Business Client Income Statement For the Year Ended December 31 102,000.00 $77,400.00 $10,000.00 1,800.00 $12,800.00 2,800.00 10,000.00 3,500.00 6,500.00 Change Sales Revenues ASSETS Cash Accounts Receivable Inventories Current Year Prior Year $8,000.0012,000.00(4000.00Cost of goods sold $ 16,900.00 $ $ 37,600.00 25,900.00$ 11,700.00 Other Operating Expenses $ 62,500.00 46,400.00 16,100.00 Operating Income $105,000.00 105,000.00 S S (20,000.00)S(10,000.00) S (10,000.00)Income before income taxes $ 147,500.00 141,400.00 6,100.00 ncome tax expense 8,500.00 8,400.00 Depreciation expense Total Current Assets Property, Plant, Equipment Less: Accumulated Depreciation Interest Expense Total Assets LIABILITIES Accounts Payable Income Taxes Payable Interest Payable Other Accrued Liabilities Net Income $31,400.00 30,000.00 1,400.00 3,000.00 S 4,000.00 $ 4,000.00 (1,000.00) 1,800.00 2,200.00 $ 11,000.00 14,000.00 $ (3,000.00) Total Current Liabilitites Long-Term Debt 49,400.00 49,800.00 400.00) 40,000.00 40,000.00 S S 89,400.00S89,800.00 S(400.00 Total Liabilities STOCKHOLDER\'S EQUITY Contributed Capital Retained Earnings $ 10,000.00 10,000.00 $ $ 48,100.00 41,600.00 6,500.00 $58,100.00 51,600.00 6,500.00 $ 147,500.00 141,400.00 6,100.00 Total Stockholder\'s Equity Total Liabilities and Stockholder\'s Equity

Solution

Cash flow from operating activities :

Net cash flow of operating = $4000

Cash flow from operating activities
Net income		6500
Adjustment to reconcile net income
Depreciation expense	10000
Increase account receivable	-8400
Increse inventory	-11700
Increase account payable	1400
Decrease income tax payable	-1000
Increase interest payable	2200
Decrease accured liabilities	-3000
		-10500
Net cash flow from operating activities		-4000