Question

Fitz 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.

Selected 2017 Income Statement Data		Selected Year-End 2017 Balance Sheet Data
Net income	\(374,000	Accounts receivable decrease	\)17,100
Depreciation expense	44,000	Inventory decrease	42,000
Amortization expense	7,20 0	Prepaid expenses increase	4,700
Gain on sale of plant assets	6,000	Accounts payable decrease	8,200
		Salaries payable increase	1,200

Short answer

Net cash provided by operating activities is $466,600

Step-by-step solution

Meaning of Cash flow statement

The cash inflows and outflows for a given accounting period are reported in the statement of cash flows, often known as the cash flow statement. In other words, this report details what expenses were made and where money was spent throughout the reporting period.

Preparing Operating activities

Fitz Company
Statement of Cash Flows—Operating Section under Indirect Method
For the year ended December 31, 2017
Cash flow from Operating activities
Net Income	$374,000
Adjustment to reconcile net income to net cash provided by operating activities
Income item not affecting the cash
Depreciation expense	44,000
Amortization expense	7,200
Gain on sale of plant assets	(6,000)
Changes in current operating assets and liabilities
Decrease in accounts receivables	17,100
Decrease in inventory	42,000
Increase in prepaid expense	(4,700)
Decrease in accounts payable	(8,200)
Increase in salaries payable	1,200
Net cash provided by operating activities	$466,600