The accounting records of Kesswil Company provided the data below. Net loss ($40,000) Depreciation expense 12,000 Increase in salaries payable 11,000 Increase in accounts receivable 4,000 Decrease in inventory 4,800 Amortization of patent 700 Decrease in premium on bonds payable 500 Requirements: Determine the following: (1) Increase (decrease) in operating assets (net): (2) Increase (decrease) in operating liabilities (net): (3) Net cash flows from operating activities:

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ladeitan ladeitan · Answer 1 · 2020-05-18T03:31:05+02:00

Answer:

Increase (decrease) in operating assets (net)* $800

Increase (decrease) in operating liabilities** $10,500

Net cash flows from operating activities ($16,000)

Explanation:

Kesswil Company

Statement of cash flows (extract)

Net loss ($40,000)

Add: Depreciation expense 12,000

Amortization of patent 700

Increase (decrease) in operating assets (net)* 800

**Increase (decrease) in operating liabilities** 10,500

Net cash flows from operating activities ($16,000)

Note:

Increase in accounts receivable (4,000)

Decrease in inventory 4,800

*Increase (decrease) in operating assets (net): 800

Increase in salaries payable 11,000

Decrease in premium on bonds payable (500)

**Increase (decrease) in operating liabilities 10,500