Q13BE.
Question
Ames Company reported 2017 net income of \(151,000. During 2017, accounts receivable increased by \)13,000 and accounts payable increased by \(9,500. Depreciation expense was \)44,000. Prepare the cash flows from operating activities section of the statement of cash flows.
Step-by-Step Solution
VerifiedThe cash flow from operating activities is equal to $191,500.
The method in which the cash flow statement is prepared by initially reporting the net income and adjusting to the net income regarding the non-cash expenses and revenue is known as the indirect method of cash flow.
Particular | Amount $ |
Net income | $151,000 |
Add or less: adjustments to net income |
|
Increase in accounts receivable | (13,000) |
Increase in accounts payable | 9,500 |
Depreciation expenses | 44,000 |
Cash flow from operating activities | $191,500 |