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30 September, 09:42

Software Distributors reports net income of $54,000. Included in that number is depreciation expense of $9,500 and a loss on the sale of land of $4,900. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $24,000, a decrease in inventory of $14,500, and an increase in accounts payable of $44,000. Prepare the operating activities section of the statement of cash flows using the indirect method.

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  1. 30 September, 11:05
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    Cash flow from operating 150,900

    Explanation:

    The operating activities section of he cash flow statement would like this

    $

    Net Income 54,000

    Adjustments:

    Add depreciation expense 9.500

    Add loss on sale of land 4,900

    decrease in account receivable 24,000

    Decrease in inventory 14,500

    Decrease in payable 44,000

    Cash flow from operating 150,900

    All decrease in assets and increase in liabilities are added. All increase in assets and decrease in liabilities are subtracted.
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