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The accounting records of EZ Company provided the data below.

Net income $57,600
Depreciation expense 10,600
Increase in inventory 3,300
Decrease in salaries payable 2,280
Decrease in accounts receivable 4,400
Amortization of patent 780
Amortization of premium on bonds 4,160
Increase in accounts payable 7,600
Cash dividends 16,000

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

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amanarsalan

Answer:

Please see the solution below:

Explanation:

CASH FLOWS FROM OPERATING ACTIVITIES  $

Net Income     57,600

Adjustments to reconcile net income to      

net cash provided by operating activities:      

Depreciation on Fixed Assets    10,600

Amortization of patent    780

Amortization of premium on bond premium   4,160

(Increase) Decrease in Current Assets:      

Inventory      (3,300)

Accounts Receivables    4,400

Increase (Decrease) in Current Liabilities:    

Salaries Payable     (2,280)

Accounts Payable     7,600

NET CASH PROVIDED BY OPERATING ACTIVITIES 79,560

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