Exercise 16-4 Indirect: Cash flows from operating activities LO P2

Required: Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities The following income statement and information about changes in noncash current assets and current liabilities are reported. 2,317,000 1,135,330 1,181,670 SONAD COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $ 317,429 Depreciation expense 55,608 Rent expense 62,559 Amortization expenses-Patents 6,951 Utilities expense 25,487 Gain on sale of equipment Net income 468,034 713,636 9,268 722,904 $ Changes in current asset and current liability accounts for the year that relate to operations follow. Accounts receivable Inventory $ 42,950 increase 16,925 increase Accounts payable Salaries payable $ 10,450 decrease 5,700 decrease