Kennedy, Inc. reported the following data:
Net income $127,659
Depreciation expense 16,038
Loss on disposal of equipment 11,080
Gain on sale of building 18,917
Increase in accounts receivable 7,995
Decrease in accounts payable 3,476
Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash outflows, a decrease in cash, cash payments, or any negative adjustments.
Kennedy, Inc.
Statement of Cash Flow
Cash flows from operating activities:
Net income
$
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense
Loss on disposal of equipment
Gain on sale of building
Changes in current operating assets and liabilities:
Increase in accounts receivable
Decrease in accounts payable
Net cash flow from operating activities

Cash flows from operating activities section of the cash flow statement shows the sources and uses of cash from ongoing normal business activities of a company in a particular period.

The cash flows from operating activities section of the statement of cash flows of Kennedy, Inc. can be prepared as follows:

Kennedy, Inc.

Statement of Cash Flow

Particulars Amount ($)

Cash flows from operating activities:

Net income 127,659

Adjustments to reconcile net income

to net cash flow from operating activities:

Depreciation expense 16,038

Loss on disposal of equipment 11,080

Gain on sale of building (18,917)

Changes in current operating assets and liabilities:

Increase in accounts receivable (7,995)

Decrease in accounts payable (3,476)

Net cash flow from operating activities 124,389