Cash flows from operating activities (indirect)
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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.)
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Solution Summary
This provides the steps to calculate the Cash flows from operating activities (indirect)
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Cash Flows from Operating Activity
Net Income 374000
Add Non cash expenses
Depreciation 44000
Amortization expense 7200
Working Capital adjustments
Decrease in Accounts ...
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