Question

KJ Company, a manufacturer, uses the indirect method for preparing its statement of cash flows. The company has provided the following information pertaining to its recent year of operation: Cash flow from operating activities, $156,000 Accounts payable increased $13,000 Prepaid assets decreased $10,000 Depreciation expense was $14,000 Accounts receivable increased $25,000 Loss on sale of a depreciable asset was $8,000 Wages payable decreased $11,000 Unearned revenue decreased $21,000 Patent amortization expense was $5,000 How much was KJ's net income

Answer 1

Answer:

Net income $163,000

Explanation:

The computation of the net income is shown below:

Cash flow from operating activities

Net income $163,000

Add: Patent amortization expense $5,000

Add: Accounts payable increased $13,000

Add; Prepaid assets decreased $10,000

Add: Depreciation expense  $14,000

Less: Accounts receivable increased $25,000

Add: Loss on sale of a depreciable asset $8,000

Less: Wages payable decreased $11,000

Less: Unearned revenue decreased $21,000

net cash flows from operating activities $156,000