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Alley Cellular accountants have assembled the following data for the year ended November ​30, 2018: Cash receipt from sale of land $27,000Depreciation expense 2,000 Cash payment of dividends 5,800Cash receipt from issuance of common stock 17,000 Net income $ 55,000Cash purchase of equipment 44,000Decrease in current liabilities 20,000Increase in current assets other than cash 27,000Prepare the operating activities section using the indirect method for Alley ​Cellular's statement of cash flows for the year ended November ​30, 2018. ​

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Answer:

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is presented below:

Cash flow from Operating activities - Indirect method

Net income $55,000

Adjustment made:

Add : Depreciation expense $2,000

Less: Increase in current assets other than cash -27,000

Less: Decrease in current liabilities -$20,000

Total of Adjustments -$45,000

Net Cash flow from Operating activities                $10,000

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