The income statement and selected balance sheet information for Fudnuddler Corporation for the year ended December 31, 2011 is presented below.
Sales Revenue $300,000
Cost of Goods Sold 180,000
Depreciation Expense 20,000
Salaries Expense 30,000
Rent Expense 12,000
Insurance Expense 12,000
Interest Expense 11,000
Utilities Expense 10,000
Net Income $25,000
Selected Balance Sheet Accounts
Accounts receivables 15,000 10,000
Merchandise Inventory 20,000 22,000
Prepaid rent 1,000 0
Accounts Payable 11,000 14,000
Salaries Payable 2,000 3,000
Prepare the cash flows from operating activities section of the 2011 statement of cash flows using the indirect method.
Your tutorial gives you instruction to help you figure out if the reconciling item adds or reduces Net Income to get to Operating Cash Flows.