Software Distributors reports net income of $65,000. Included in that number is depreciation expense of $15,000 and

Question:

Software Distributors reports net income of $65,000. Included in that number is depreciation expense of $15,000 and a loss on the sale of land of $6,000. A comparison of this year’s and last year’s balance sheets reveals a decrease in of $35,000, a decrease in inventory of $20,000, and an increase in of $55,000.

Required:
Prepare the operating activities section of the statement of cash flows using the indirect method. Do you see a pattern in Software Distributors’ adjustments to net income to arrive at operating cash flows? What might this imply?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...