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Required information [The following information applies to the questions displayed below.) Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method.
Required information [The following information applies to the questions displayed below.) Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI's Year 2 and Year 1 year-end balance sheets: Account Title Year 2 Year 1 Accounts receivable $ 20,000 $ 27,600 Merchandise inventory 59,500 48, 100 Prepaid insurance 17,000 26,500 Accounts payable 26,600 16,900 Salaries payable 4,850 4,200 Unearned service revenue 750 2,750 The Year 2 income statement is shown next: Income Statement Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment Net income $ 609,000 (381,000). 228,000 5,500 (38,000) (148,000) (5,100) 42,400 4,600 $ 47,000 b. Prepare the operating activities section of the statement of cash flows using the indirect method for Year 2. (Amounts to be deducted should be indicated with a minus sign.) GREEN BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct: Add: noncash expenses Net cash flow from operating activities $
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