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Sun Company provided the following data for the preparation of the statement of cash flows for the current year: Increase in accounts receivable 300,000 Decrease in income tax payable 170,000 Depreciation 1,000,000 Net income250,000 Gain on sale of equipment __440,000 I oss on sale of building 210,000 16 - 25
Sun Company provided the following data for the preparation of the statement of cash flows for the current year:
Increase in accounts receivable 300,000 Decrease in income tax payable 170,000 Depreciation 1,000,000 Net income250,000 Gain on sale of equipment __440,000 I oss on sale of building 210,000
16 - 25. Using the indirect method, what amount should be reported as net cash provided by operating activities?
Expert Solution
| Calculation of Net Cash provided by Operating Activities: | |
| Particulars | Amount |
| Net Income | 250,000 |
| Adjustments to reconcile Net Income: | |
| Depreciation | 1,000,000 |
| Gain on sale of equipment | -440,000 |
| Loss on sale of building | 210,000 |
| Changes in working capital: | |
| Increase in accounts receivable | -300,000 |
| Decrease in income tax payable | -170,000 |
| Net Cash provided by Operating Activities | 550,000 |
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