Gutierrez Company reported net income of $225,000 for 2020. Gutierrez also reported depreciation expense of $45,000 and

Question:

Gutierrez Company reported net income of $225,000 for 2020. Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of plant assets. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.

Instructions
Prepare the operating activities section of the statement of cash flows for 2020. Use the indirect method.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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