Windsor, Inc. reported net income of $200,980 for 2022. Windsor, Inc. also reported depreciation expense of $34,880 and a loss of $4,630 on

Windsor, Inc. reported net income of $200,980 for 2022. Windsor, Inc. also reported depreciation expense of $34,880 and a loss of $4,630 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $14,040 for the year, a $16,780 increase in accounts payable, and a $4,390 increase in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2022. Use the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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  1. Answer:

    $238,840

    Explanation:

    The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

    Cash flow from Operating activities – Indirect method

    Net income $200,980

    Adjustment made:

    Add : Depreciation expense $34,880

    Add: Loss  n the disposal of plant assets $4,630

    Less: Increase in accounts receivable -$14,040

    Add: Increase in accounts payable $16,780

    Less: Increase in prepaid expense -$4,390

    Total of Adjustments $37,860

    Net Cash flow from Operating activities                           $238,840

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