Alley Cellular accountants have assembled the following data for the year ended November 30, 2018: Cash receipt from sale of land $27,000Depreciation expense 2,000 Cash payment of dividends 5,800Cash receipt from issuance of common stock 17,000 Net income $ 55,000Cash purchase of equipment 44,000Decrease in current liabilities 20,000Increase in current assets other than cash 27,000Prepare the operating activities section using the indirect method for Alley Cellular's statement of cash flows for the year ended November 30, 2018.

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Business

Dana Bishop

12 March, 06:16

Alley Cellular accountants have assembled the following data for the year ended November 30, 2018: Cash receipt from sale of land $27,000Depreciation expense 2,000 Cash payment of dividends 5,800Cash receipt from issuance of common stock 17,000 Net income $ 55,000Cash purchase of equipment 44,000Decrease in current liabilities 20,000Increase in current assets other than cash 27,000Prepare the operating activities section using the indirect method for Alley Cellular's statement of cash flows for the year ended November 30, 2018.

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Jordan Dunn · Answer 1

The preparation of the Cash Flows from Operating Activities-Indirect Method is presented below:

Cash flow from Operating activities - Indirect method

Net income $55,000

Adjustment made:

Add : Depreciation expense $2,000

Less: Increase in current assets other than cash - 27,000

Less: Decrease in current liabilities - $20,000

Total of Adjustments - $45,000

Net Cash flow from Operating activities $10,000