es Exercise 12-2 (Algo) Indirect: Reporting cash flows from operations LO P2 Hampton Company reports the following information for its recent calendar year. Income Statement Data Sales Expenses: Cost of goods sold Salaries expense Depreciation expense Net income $ 71,000 Accounts receivable increase Inventory decrease Salaries payable increase 35,000 11,000 8,000 $ 17,000 Selected Year-End Balance Sheet Data Required: Prepare the operating activities section of the statement of cash flows using the indirect method. Note: Amounts to be deducted should be indicated with a minus sign. Statement of Cash Flows (partial) Cash flows from operating activities-indirect method Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Changes in current operating assets and liabilities Accounts receivable increase Inventory decrease Salaries payable increase Net cash provided by operating activities Net cash used in operating activities 8,000 (5,000) 3,000 900 $ 5,000 3,000 900 6,900

Exercise 12-2 (Algo) Indirect: Reporting cash flows from operations LO P2 Hampton Company reports the following information for its recent calendar year. Required: Prepare the operating activities section of the statement of cash flows using the indirect method. Note: Amounts to be deducted should be indicated with a minus sign