Exercise 12-3

Sosa Company reported net income of $190,000for 2017. Sosa Company also reported depreciation expense of $35,000and a loss of $5,000on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $15,000for the year, a $17,000increase in accounts payable, and a $4,000increase in prepaid expenses.

Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.(Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)