Operating activities section
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Burtric Company's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below:
Increases are without brackets and decreases are bracketed.
Debit balances:
Cash $ 24,000
Accounts receivable 15,000
Inventory (18,000)
Prepaid expenses (6,000)
Long-term investments 10,000
Plant and equipment 40,000
Credit balances:
Accumulated depreciation 32,000
Accounts payable (14,000)
Accrued liabilities 11,000
Taxes payable (8,000)
Bonds payable (40,000)
Deferred taxes 12,000
Common stock 10,000
Retained earnings 62,000
The company declared and paid cash dividends of $36,000 last year.
Required: Construct in good form the operating activities section of the company's statement of cash flows for the year. Use the indirect method.
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Solution Summary
The solution explains how to prepare the operating activities section of the statement of cash flows.
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