Reference no: EM132683885

Problem - Determining net income from net cash flow from operating activities

Shinlund, Inc., reported a net cash flow from operating activities of $243,750 on its statement of cash flows for the year ended December 31, 2012. The following information was reported in the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method:

Decrease in income taxes payable $5,250

Decrease in inventories 13,050

Depreciation 20,100

Gain on sale of investments 9,000

Increase in accounts payable 3,600

Increase in prepaid expenses 2,025

Increase in accounts receivable 9,750

Required -

a. Determine the net income reported by Shinlund, Inc., for the year ended December 31, 2012.

b. Briefly explain why Shinlund's net income is different than cash flows from operating activities.