Based on the Following Income Statement and Balance Sheet for Rashid

question 9

Essay

Based on the following income statement and balance sheet for Rashid Corporation,determine the cash flows from operating activities using the indirect method.
$\begin{array}{c}\text { RASHID CORPORATION}\\\text { Income Statement}\\\text { For Year Ended December 31, 2013}\\\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 504,000 \\\hline \text { Cost of goods sold } & \$ 327,600 & \\\hline \text { Depreciation expense } & 42,000 & \\\hline \text { Other operating expenses } & 125,500 & (495,100) \\\hline \text { Other gains (losses): } & & \\\hline \text { Gain on sale of equipment } & & \underline{7,200} \\\hline \text { Income before taxes } & & \$ 16,100 \\\hline\text { Income tax expense } & & (4,800) \\\hline \text { Net income } & & \$ 11,300\\ \hline\end{array}\end{array}$

$\begin{array}{c}\text {RASHID CORPORATION}\\\text {Balance Sheets}\\\text {At December 31}\\\begin{array}{|l|r|r|}\hline &2013&2012\\\hline \text { Assets } & & \\\hline \text { Cash } & \$ 64,650 & \$ 55,800 \\\hline \text { Accounts receivable } & 21,000 & 29,000 \\\hline \text { Inventory } & 58,000 & 52,100 \\\hline \text { Equipment } & 240,000 & 222,000 \\\hline \text { Accumulated depreciation } & (106,000) & (96,000) \\\hline \text { Total assets } & \$ 277,650 & \$ 262,900 \\\hline\\\hline\text { Liabilities: } & & \\\hline \text { Accounts payable } & \$ 28,400 & \$ 23,700 \\\hline \text { Income taxes payable } & \underline{1,050} & \underline{1,200} \\\hline \text { Total liabilities } & \$ 29,450 & \$ 24,900\\\hline \text { Equity } & & \\\hline \text { Common stock } & \$ 106,000 & \$ 106,000 \\\hline \text { Contributed Capital in excess of par value } & 18,000 & 18,000 \\\hline \text { Retained earnings } & \underline{124,200} & \underline{114,000} \\\hline \text { Total equity } & \$ 248,200 & \$ 238,000 \\\hline \text { Total liabilities and equity } & \$ 277,650 & \$ 262,900 \\\hline \end{array}\end{array}$

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