Budget Auto Parts Company Uses the Indirect Method to Prepare $\begin{array}{c} \text { Budget Company} &\\ \text { Income Statement } &\\ \text { Year Ended December 31, 2017 } &\end{array}$

question 106

Essay

Budget Auto Parts Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement:
$\begin{array}{c} \text { Budget Company} &\\ \text { Income Statement } &\\ \text { Year Ended December 31, 2017 } &\end{array}$
$\begin{array}{ll}\text { Sales Revenue } & \$ 360,000 \\\text { Interest Revenue } & 1,500 \\\text { Gain on Sale of Plant Assets } & \underline{6,000}\\\text { Total Revenues and Gains } &&\$367,500 \\\text { Cost of Goods Sold } & 165,000 \\\text { Salary Expense } & 67,500 \\\text { Depreciation Expense } & 18,000 \\\text { Other Operating Expenses } & 34,500\\\text { Interest Expense } & 1,500 \\\text { Income Tax Expense } & \underline{7,500} \\\text { Total Expenses } &&\underline{294,000} \\\text { Net Income (Loss) } &&\underline{\$73,500}\end{array}$ 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:

Signal Transmission

The process of transmitting information in the form of signals from one part of an organism to another, essential for coordination and function in biological systems.

Reception

Process of detecting a stimulus.

Neurotransmitters

Chemical substances that transmit signals across the synaptic gap from one neuron to another in the nervous system.

Prostaglandins

A group of local regulators derived from fatty acids; synthesized by most cells of the body and produce a wide variety of effects; sometimes called local hormones.