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    Determine net income

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    Determining net income from net cash flow from operating activities

    Sanhueza, Inc. reported a net cash flow from operating activities of $187,600 on its statement of cash flows for the year ended December 31, 2010. The following information was reported in the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method:

    Decrease in income taxes payable $3,500
    Decrease in inventories 8,600
    Depreciation 13,300
    Gain on sale of investments 6,000
    Increase in accounts payable 2,400
    Increase in prepaid expenses 1,500
    Increase in accounts receivable 6,500

    Determine the net income reported by Sanhueza, Inc., for the year ended December 31, 2010.

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    Solution Preview

    We can make the schedule of cash flow from operating activities to determine the net income.

    Net Income ?

    Less: Decrease in income taxes ...

    Solution Summary

    The solution explains how to determine the net income given the cash flow from operating activities.