During a recent year (ended December 31, 2017), Nicoles Getaway Spa (NGS) reported net income of $2,300.

Question:

During a recent year (ended December 31, 2017), Nicole’s Getaway Spa (NGS) reported net income of $2,300. The company reported the following activities:

a. Increase in inventories of $400

b. Depreciation of $3,000

c. Increase of $2,170 in prepaid expenses

d. Payments of $4,600 on long-term debt

e. Purchased new spa equipment for $7,582

f. Payments on accounts payable exceeded purchases by $320

g. Collections on accounts receivable exceeded credit sales by $859

h. Issued $10,000 of common shares

Required:

Based on this information, prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method. Assume the cash balance at December 31, 2016, was $7,000.

Accounts Payable
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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...

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