Salud Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2017. (Amounts to be deducted should be indicated with a minus sign.) Selected 2017 Income Statement Data Selected Year-End 2017 Balance Sheet Data
Net income $470,000 Accounts receivable increase $40,400
Depreciation expense 87,000 Prepaid expenses decrease 16,500
Gain on sale of machinery 23,000 Accounts payable increase 10,000
Wages payable decrease 2,900

Cash generated by operating activities is $517,200.

Explanation:

Cash flows from operating activities

Net Income                                                                $470,000

Adjustments to reconcile net income to operating cash flow

Add: Depreciation Expense        $87,000

Less: Gain on Sale of Machinery$-23,000             $64,000

Change in Operating Assets and Liabilities

Accounts receivable increase$-40,400

Prepaid expenses decrease         $16,500

Accounts payable increase          $10,000

Wages payable decrease             $-2,900               $-16,800

Cash generated by operating activities                   $517,200

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