Cash Cash Flows from Operating Activities -- Indirect Method The net income reported on the income statement for the current year was $116,900. Depreciation recorded on store equipment for the year amounted to $19,300 Balances of the current asset and current ability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year $45,940 $41,810 Accounts receivable (net) 32,940 30,900 Inventories 44,980 47,040 Prepaid expenses 5,050 3,970 Accounts payable (merchandise creditors) 43,050 39,550 Wages payable 23,520 25,840 a. Prepare the "Cash flows from operating activities' section of the statement of cash flows, using the Indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments Statement of Cash Flows (partial) Cash flows from operating activities: Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Increase in accounts receivable DI Decrease in inventories Increase in prepaid expenses Accounts receivable (net) 32,940 30,900 Inventories 44,980 47,040 Prepaid expenses 5,050 3,970 Accounts payable (merchandise creditors) 43.050 39,550 Wages payable 23.520 25,840 a. Prepare the "Cash flows from operating activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments, Statement of Cash Flows (partial) Cash flows from operating activities: Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in wages payable Net cash flow from operating activities 0 lll. 0 Cash Flows from Operating activities-Indirect Method The net income reported on the income statement for the current year was $201,100. Depreciation recorded on equipment and a building amounted to $60,100 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $54,500 $56,680 Accounts receivable (net) 69,110 69,940 Inventories 136,250 120,500 Prepaid expenses 7,580 7,990 Accounts payable (merchandise creditors) 60,880 63,250 Salaries payable 8,770 7,880 a. Prepare the "Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments Statement of Cash Flows (partial) Cash flows from operating activities: Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventories II III Decrease in prepaid expenses Cash $54,500 $56,680 Accounts receivable (net) 69,110 69,940 Inventories 136,250 120,500 Prepaid expenses 7.580 7,990 Accounts payable (merchandise creditors) 60,880 63,250 Salaries payable 8,770 7,880 a. Prepare the "Cash Flows from Operating Activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventories Decrease in prepaid expenses Decrease in accounts payable Increase in salaries payable I 11100 0 Net cash flow from operating activities Rock