Cash Flows from Operating Activities-Indirect Method
the Data Below Are

question 6

Essay

Cash flows from operating activities-indirect method
The data below are taken from the financial statements of the Spectrum Corporation:
$$\begin{array} { | l | l | l | } \hline \text { Income Statement: } & 2009 & \\\hline & & \\\hline \text { Net income } & \$ 299,000 & \\\hline \text { Depreciation expense } & 101,000 & \\\hline \text { Amortization of trademark } & 20,000 & \\\hline \text { Loss on sale of machinery } & 38,000 & \\\hline & & \\\hline \text { Balance Sheet: } & 12 / 31 / 09 & 12 / 31 / 08 \\\hline & & \\\hline \text { Accounts receivable } & \$ 195,000 & \$ 204,000 \\\hline \text { Inventory } & 353,000 & 321,000 \\\hline \text { Prepaid expenses } & 50,000 & 38,000 \\\hline \text { Accounts payable } & 314,000 & 290,000 \\\hline \text { Accrued expenses payable } & 158,000 & 159,000 \\\hline\end{array}$$
Complete the partial statement of cash flows for the year ended December 31, 2009, showing the computation of net cash flows from operating activities by the indirect method:

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given market at a specific time period.

Perfectly Inelastic

A situation where the quantity demanded or supplied does not change in response to a change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Price Elasticity

The degree to which the demand for a product is affected by price fluctuations, reflecting the price sensitivity of buyers.