Chapter 16 #5

Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $298,900. Depreciation recorded on equipment and a building amounted to $89,400 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End Beginning of Year of Year Cash $75,020 $78,770 95,130 97,200 187.550 167,470 Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Salaries payable 11.110 10.430 83,800 87,910 12,080 10,950 a. Prepare the Cash Flows from (used for) 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 (used for) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: REVOU 10.950 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus slon to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Hows (partial) Cash flows from (used for) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flows from operating activities b. If the direct method had been used, would the net cash flow from operating activities have been the same