Operating activities—indirect method (Learning Objective 3) 10–15 min.

The current sections of Al Houla, Inc.’s balance sheets at December 31, 2013 and 2014 are presented here. Al Houla’s net income for 2014 was $386,000. Depreciation expense was $46,000.

Current Assets Cash.....................................................

Accounts Receivable ............................

Inventory..............................................

Prepaid Insurance ................................

Total Current Assets..................................

Current Liabilities Interest Payable ...................................

Accounts Payable.................................

Total Current Liabilities .............................

$ 99,000 89,000 173,000 22,000

$383,000 2013

$106,000 90,000 160,000 26,000

$382,000

$ 15,000 80,000

$ 95,000

$ 5,000 92,000

$ 97,000 2014 Requirement 1. Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ending December 31, 2014, using the indirect method.

AppendixLO1