(Calculate cash from operations using the indirect method, LO 1, 3) Consider the following non-cash current operating account information of Yahk Ltd. (Yahk):

Yahk’s net income for 2015 was $57,000. In addition, Yahk reported a depreciation expense of $70,000 and a gain on sale of equipment of $33,000.
Required: ©

a. Calculate cash from operations for Yahk using the indirect method and prepare the cash from operations section of Yahk’s cash flow statement.

b. Explain why cash from operations is different from net income in 2015.

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2015 2014 2015 2014 Accounts receivable $ 88,000 $ 77,500 Accounts payable $410,000 $450,500 Inventory 312,500 285,500 Wages payable 38,500 30,000 Prepaids 12,000 20,000 Taxes payable 75,000 85,000 Interest payable 42,750 32,500 Total current operating Total current operating assets $412,500 $383,000 liabilities $566,250 $598,000