Nebraska Auto Parts Company Uses the Indirect Method to Prepare

question 173

Essay

Nebraska Auto Parts Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement:
Nebraska Auto Parts Company
Income Statement
Year Ended December 31, 2018
$\begin{array}{l}\begin{array}{ll}\text { Sales Revenue } & \$ 360,000 \\\text { Interest Revenue } & 1,500 \\\text { Gain on Sale of Plant Assets } & \underline{6,000}\\\text { Total Revenues and Gains }&&\$367,500\\\text { Cost of Goods Sold } & 165,000 \\\text { Salary Expense } & 67,500 \\\text { Depreciation Expense } & 18,000 \\\text { Other Operating Expenses } & 34,500 \\\text { Interest Expense } & 1,500 \\\text { Income Tax Expense } & 7,500\\\text { Total Expenses}&&\underline{294,000}\\\text { Net Income (Loss)}&&\underline{\$73,500}\end{array}\end{array}$
Additional information provided by the company includes the following:
Current assets other than cash increase by $36,000.
Current liabilities decrease by $1,500.
Prepare the operating activities section of the statement of cash flows.

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Definitions:

Ground of Intoxication

A legal justification or defense based on the claim that an individual's actions were significantly impaired due to the influence of alcohol or drugs.

Ratifying the Contract

The act of formally confirming or approving an agreement to make it officially valid.

After Reaching Majority

A legal status attained when an individual has reached the age of majority, which is considered the threshold of adulthood and conveys full legal rights and responsibilities.

Mind-Altering Drug

A substance that changes mental processes such as cognition, mood, or consciousness.