Indirect method; reconciliation of net income to net cash flows from operating activities
Response to the following problem:
The accounting records of Baddour Company provided the data below. Prepare a reconciliation of net income to net cash flows from operating activities.
Net loss $5,000
Depreciation expense 6,000
Increase in salaries payable 500
Decrease in accounts receivable 2,000
Increase in inventory 2,300
Amortization of patent 300
Reduction in discount on bonds 200