Question

Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.


RASHID CORPORATION Income Statement For Year Ended December 31, 2013
Sales $504,000
Cost of goods sold $327,600
Depreciation expense 42,000
Other operating expenses 125,500 (495,100)
Other gains (losses):
Gain on sale of equipment 7,200
Income before taxes $ 16,100
Income tax expense (4,800)
Net income $ 11,300

RASHID CORPORATION Balance Sheets At December 31
2013 2012
Assets
Cash $ 64,650 $ 55,800
Accounts receivable 21,000 29,000
Inventory 58,000 52,100
Equipment 240,000 222,000
Accumulated depreciation (106,000) ( 96,000)
Total assets $277,650 $262,900
Liabilities:
Accounts payable $ 28,400 $ 23,700
Income taxes payable 1,050 1,200
Total liabilities $ 29,450 $ 24,900
Equity
Common stock $106,000 $106,000
Contributed Capital in excess of par value 18,000 18,000
Retained earnings 124,200 114,000
Total equity $248,200 $238,000
Total liabilities and equity $277,650 $262,900

Answer

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