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The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold Gross
The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $304,277 Depreciation expense 53,304 Rent expense 59,967 Amortization expenses-Patents 6,663 Utilities expense 24,431 $2,221,000 1,088, 290 1, 132,710 Gain on sale of equipment Net income 448, 642 684,068 8,884 $ 692,952 Accounts receivable Inventory $17,500 increase 14,675 increase Accounts payable Salaries payable $13,850 decrease 4,200 decrease Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Answer is complete but not entirely correct. Statement of Cash Flows (partial) Cash flows from operating activities Net income $ 692,952 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 53,304 Gain on sale of equipment (8,884) Amortization expense-Patents 6,663 Changes in current operating assets and liabilities Increase in accounts receivable Increase in inventory Decrease in accounts payable Decrease in salaries payable (39,500) (10,250) (11,225) (4,850) X Net cash provided by operating activities $ 678,210
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