The following information pertains to Peak Heights Company:

The following information pertains to Peak Heights Company:

   

Income Statement for Current Year
Sales			$	87,000
Expenses
Cost of goods sold	$	51,775
Depreciation expense		8,100
Salaries expense		11,600		71,475
Net income			$	15,525

   

Partial Balance Sheet	Current year		Prior year
Accounts receivable	$	10,000	$	12,900
Inventory		12,500		9,600
Salaries payable		1,640		890

 

Required:

Present the operating activities section of the statement of cash flows for Peak Heights Company using the indirect method. (List cash outflows as negative amounts.)

Answer

Explanation:

Accounts receivable decrease = ($10,000 − $12,900) = $2,900

Inventory increase = ($12,500 − $9,600) = $2,900

Salaries payable increase = ($1,640 − $890) = $750