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The accounting records of Baddour Company provided the data below.

Net loss $5,000
Depreciation expense 6,000
Increase in salaries payable 500
Decrease in accounts receivable 2,000
Increase in inventory 2,300
Amortization of patent 300
Reduction in discount on bonds 200

Required:
Prepare a reconciliation of net income to net cash flows from operating activities.

Respuesta :

Answer:

Net cash flow from operating activities $1,700

Explanation:

The preparation of the reconciliation of net income to net cash flows from operating activities is shown below:

Net loss -$5,000

Add: Depreciation expense 6,000

Add: Increase in salaries payable 500

Add: Decrease in accounts receivable 2,000

Less; Increase in inventory 2,300

Add; Amortization of patent 300

Add; Reduction in discount on bonds 200

Net cash flow from operating activities $1,700

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