Use the following income statement and information about changes in noncash current assets and liabilities to (1) prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method and (2) compute the company's cash flow on total assets ratio for the year assuming that average total assets are $525,250.Davey CompanyIncome StatementFor Year Ended December 31Sales?$880,000Cost of goods sold? 487,000Gross profit?$393,000Operating expenses:?? Salaries expense$144,000? Rent expense 76,000? Depreciation expense 45,000? Amortization expense 22,000? Utilities expenses 12,000 299,000Income from operations?$ 94,000Loss on sale of equipment? 14,000Income before taxes?$
80,000Income tax expense? 28,500Net Income?$ 51,500Changes in current asset and current liability accounts for the year that relate to operations follow.Increase in accounts receivable$ 32,000Increase in accounts payable (all accounts? payable transactions are for inventory)13,500Decrease in prepaid expenses9,200Decrease in merchandise inventory14,000Decrease in long-term notes payable20,000
What will be an ideal response?
(1)
| Davey Company | ? | ? |
| Cash flows from operating activities: | ? | ? |
| Net income | $ 51,500 | ? |
| Adjustments to reconcile net income to net | ? | ? |
| cash provided by operating activities: | ? | ? |
| Increase in accounts receivable | (32,000) | ? |
| Decrease in merchandise inventory | 14,000 | ? |
| Decrease in prepaid expenses | 9,200 | ? |
| Increase in accounts payable | 13,500 | ? |
| Depreciation expense | 45,000 | ? |
| Amortization expense | 22,000 | ? |
| Loss on sale of equipment | 14,000 | ? |
| Net cash provided by operating activities | ? | $137,200 |
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