Computing operating acitivites cash flow—indirect method The records of McKnight Color Engraving reveal the following:
|
Net income |
$ 38,000 |
Depreciation |
$ 4,000 |
|
Sales revenue |
51,000 |
Decrease in current liabilities |
28,000 |
|
Loss on sale of land |
5,000 |
Increase in current assets |
|
|
Acquisition of land |
39,000 |
other than cash |
14,000 |
Requirements
1. Compute cash flows from operating activities by the indirect method.
2. Evaluate the operating cash flow of McKnight Color Engraving. Give the reason for your evaluation.