Respuesta :
Answer:
2017 Cashflows from operations Skysong, Inc.
Amount in Dollars
Net earnings 196,870.00
Additions to cash
Depreciation 36,940.00
Loss on asset disposal 4,720.00
Increase in accounts receivable (13,760.00)
Increase in accounts payable 16,070.00
Increase in prepaid expenses (4,250.00)
Net cash flows from operating activities 236,590.00
Explanation:
Using the Indirect method, Depreciation as a non cash item is added back to the net income. An increase in an asset is an outflow of cash while an increase in a liability is treated as an inflow of cash. Hence, operating activities section of the statement of cash flows for 2017 is as shown below;
Amount in Dollars
Net earnings 196,870.00
Additions to cash
Depreciation 36,940.00
Loss on asset disposal 4,720.00
Increase in accounts receivable (13,760.00)
Increase in accounts payable 16,070.00
Increase in prepaid expenses (4,250.00)
Net cash flows from operating activities 236,590.00
