Question
Cash Flows from Operating ActivitiesIndirect Method The net income reported on the income statement for the current year was $117,100. Depreciation recorded on store equipment
Cash Flows from Operating ActivitiesIndirect Method
The net income reported on the income statement for the current year was $117,100. Depreciation recorded on store equipment for the year amounted to $19,300. 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 | $45,430 | $41,800 | ||
| Accounts receivable (net) | 32,570 | 30,890 | ||
| Inventories | 44,480 | 47,030 | ||
| Prepaid expenses | 5,000 | 3,970 | ||
| Accounts payable (merchandise creditors) | 42,570 | 39,540 | ||
| Wages payable | 23,260 | 25,830 | ||
| 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 | ||
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Accounting for Governmental and Nonprofit Entities
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
16th Edition
78110939, 978-0078110931
