Discussion

indirect method; reconciliation of net income to net cash flows from operating activities

The accounting records of Hampton Company provided the data below ($ in 000s).

Net Income                                              $17,300

Depreciaton  expense                                  7,800

Increase in accounts recievable                   4,000

Decrease in Inventory                                  5,500

Decrease in prepaid insurance                     1,200

Decrease in salaries payable                        2,700

increase in interest payable                            800

Required:Prepare a reconciliation of net income to net cash flows from operating activities.