Based on the Following Income Statement and Balance Sheet for Bankowski

question 167

Essay

Based on the following income statement and balance sheet for Bankowski Corporation, determine the cash flows from operating activities using the indirect method.
$\begin{array}{c} \text { Bankowski Corporation}\\ \text { Income Statement}\\ \text { For Year Ended December \( 31,20 \times 2 \)}\\\begin{array}{l|r|r}\hline \text { Sales } & & \$ 504,000 \\\hline \text { Cost of goods sold } & \$ 327,600 & \\\hline \text { Depreciation expense } & 33,000 & \\\hline \text { Other operating expenses } & \underline{125,500} & (486,100 \\\hline \text { Other gains (losses): } & & \\\hline \text { Gain on sale of equipment } & & 5,200 \\\hline \text { Income before taxes } & & \$ 23,100 \\\hline \text { Income tax expense } & & (4,800 \\\hline \text { Net income } & & \underline{\$ 18,300} \\\hline \end{array}\end{array}$

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Definitions:

Capital Spending

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Accounts Payable

The sum of money owed by a business to its vendors or lenders for products and services acquired on credit.

Top-Down Approach

An investment strategy that begins with analyzing macroeconomic factors before drilling down into the specifics of individual securities.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can maintain or grow its operations without new financing.