The following partially completed work sheet is provided for ATM Corporation, which uses the direct method in computing net cash flows from operations:
|
Accrual |
Adjustments |
Cash |
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|
Net sales revenue. . |
Basis |
Debits |
Credits |
Basis |
|
Expenses: |
$150,000 |
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|
Cost of goods sold. |
$ 75,000 |
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|
Depreciation. |
0 |
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|
Loss on sale of equipment |
0 |
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|
Other (cash) expenses. |
26,000 |
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|
Total expenses |
$101,000 |
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|
Net income (net cash flows from operations) |
$ 49,000 |
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Key:
1.Decrease in Accounts Receivable (net), $4,500.
2.Loss on sale of equipment, $1,500.
3.Increase in Inventory, $10,000.
4.Increase in Accounts Payable, $3,000.
5.Depreciation for the year, $8,000.
6.Decrease in Prepaid Expenses, $1,000.
7.Increase in Accrued Liabilities, $2,500. Complete the work sheet with the key items above and compute the net income (loss) to be reported by ATM Corporation on its income statement for 2003.