Reference no: EM13899997

Arundel Company disclosed the following information for its recent calendar year.

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,000 
Expenses Salaries expense . . . . . . . . . . . . . . 84,000
Utilities expense . . . . . . . . . . . . . . . . . . . . 14,000 
Depreciation expense . . . . . . . . . . . . . . . . 14,600 
Other expenses . . . . . . . . . . . . . . . . . . . . 3,400 
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (16,000) 
Accounts receivable decrease . . . . . . . . . . . $ 24,000 
Purchased a machine . . . . . . . . . . . . . . . . . . . 10,000 
Salaries payable increase . . . . . . . . . . . . . . . . 18,000 
Other accrued liabilities decrease . . . . . . . . 8,000

Required: 

1. Prepare the operating activities section of the statement of cash flows using the indirect method. 
2. What were the major reasons that this company was able to report a net loss but positive cash flow from operations? 
3. Of the potential causes of differences between cash flow from operations and net income, which are the most important to investors?