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    Statement of Cash Flow using indirect method

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    Rapture Company's 2011 income statement and selected balance sheet data at December 31, 2010 and 2011, follow ($ thousands).

    Income Statement
    For Year Ended December 31, 2011
    Sales revenue $ 64,000
    Cost of goods sold 19,000
    Depreciation expense 5,000
    Salaries expense 10,000
    Rent expense 2,500
    Insurance expense 1,500
    Interest expense 1,700
    Utilities expense 1,100

    Net income $ 23,200

    Selected Balance Sheet Accounts
    At December 31 2011 2010
    Accounts receivable $ 380 $ 391
    Inventory 92 71
    Accounts payable 118 126
    Salaries payable 45 34
    Utilities payable 11 8
    Prepaid insurance 8 9
    Prepaid rent 11 9

    Prepare the cash flows from operating activities section only of the company's 2011 statement of cash flows using the indirect method (amounts to be deducted should be indicated with a minus sign).

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    Solution Summary

    The solution contains cash flow statement in excel sheet using indirect method. Effect of increase and decrease of current assets and current liabilities on net cash provided by operating activities is shown in classified form. Full explanatory notes provided for treatment of various items of balance sheet including treatment of depreciation being non-cash item of income statement.