Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2021 fiscal year was $634,000. Depreciation and amortization expense of $89,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: Decrease in accounts receivable $24,000 Increase in inventory 9,400 Increase in prepaid expenses 8,700 Increase in salaries payable 10,200 Decrease in income taxes payable 13,000Required: Prepare the operating activities section of the 2021 statement of cash flows.

$726,100

Explanation:

Preparation of the operating activities section of the 2021 statement of cash flows.

Cash Flow from Operating Activities

Net Income$634,000

Adjustments:

Depreciation and amortization$89,000

Changes in operating asset and liabilities

Decrease in Account receivable$24,000

Increase in Inventory$ (9,400)

Increase in Prepaid expenses$ (8,700)

Increase in Salaries payable$10,200

Decrease in Income tax payable$ (13,000)

Operating activities $726,100

Therefore the operating activities section of the 2021 statement of cash flows will be $726,100

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