Share
Explore BrainMass

Cash flows from operating activities (indirect)

Please see pdf file.

Exercise 12-4: Cash flows from operating activities (indirect) L.O. P2
Olhstead Company's calendar-year 2008 income statement shows the following: Net Income, $374,000;
Depreciation Expense, $44,000; Amortization Expense, $7,200; Gain on Sale of Plant Assets, $6,000. An
examination of the company's current assets and current liabilities reveals the following changes (all from
operating activities): Accounts Receivable decrease, $17,100; Merchandise Inventory decrease, $42,000;
Prepaid Expenses increase, $4,700; Accounts Payable decrease, $8,200 Other Payables increase, $1,200. Use
the indirect method to compute cash flow from operating activities. (Negative amount should be indicated by
a minus sign. Omit the "$" sign in your response.)

Attachments

Solution Preview

Cash Flows from Operating Activity

Net Income 374000
Add Non cash expenses
Depreciation 44000
Amortization expense 7200

Working Capital adjustments
Decrease in Accounts ...

Solution Summary

This provides the steps to calculate the Cash flows from operating activities (indirect)

$2.19