Portions of the financial statements for Software Associates are provided below.
SOFTWARE ASSOCIATES
Income Statement
For the Year Ended December 31, 2024
Net sales
$710,000
Expenses:
Cost of goods sold
$420,000
Operating expenses
130,000
Depreciation expense
33,000
Income tax expense
49,000
Total expenses
632,000
Net income
$ 78,000
SOFTWARE ASSOCIATES
Selected Balance Sheet Data
December 31, 2024, compared to December 31, 2023
Decrease in accounts receivable
$10,000
Decrease in inventory
13,000
Increase in prepaid rent
3,000
Decrease in salaries payable
4,000
Increase in accounts payable
7,000
Increase in income tax payable
8,000
Required:
Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash
outflows and any decrease in cash as negative amounts.)
SOFTWARE ASSOCIATES
Statement of Cash Flows (partial)
For the Year Ended December 31, 2024
Cash Flows from Operating Activities:
Adjustments to reconcile net income to net cash flows from operating activities:
Net cash flows from operating activities
$ 0