Question - Cash flows from operating activities
Presented below is the income statement of Angola, Inc.
Sales $324,000
Cost of goods sold $214,000
Gross profit $110,000
Operating expenses $67,000
Income before income taxes $43,000
Income taxes $17,200
Net income $25,800
In addition, the following information related to net changes in working capital is presented.
Debit Credit
Cash $10,600
Accounts receivable $2,400
Inventories $3,600
Salaries payable (operating expenses) $12,000
Accounts payable $15,000
Income taxes payable $1,400
Depreciation expense for the year was $14,700
Deferred tax liability account increased $1,800
Required: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows -(b) using the direct method.