Cash Flows from Operating ActivitiesIndirect Method

Selected data (in thousands) derived from the income statement and balance sheet of National Beverage Corp. for a recent year are as follows:

Income statement data:

Net income$49,295

Gain on disposal of property1,200

Depreciation expense11,605

Other items involving noncash expenses1,370

Balance sheet data:

Increase in accounts receivable1,735

Decrease in inventory1,040

Increase in prepaid expenses595

Decrease in accounts payable690

Decrease in accrued and other current liabilities1,000

a. Prepare the Cash flows from operating activities section of the statement of cash flows, using the indirect method for National Beverage Corp. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Enter the amounts in thousands of dollars, as shown above.

National Beverage Co.

Cash Flows from Operating Activities

(in thousands)

Cash flows from (used for) operating activities:

$

Adjustments to reconcile net income to net cash flow from operating activities:

Changes in current operating assets and liabilities:

Net cash flow from operating activities$

b. The company has earnings and net cash flow from operating activities. The increase in accounts receivable indicates a(n) in sales. In addition, the company is using its cash to decrease its accounts payable balance, which indicates that the company is . Overall, National Beverage is doing financially.