Question
During the year, Hepworth Company earned a net income of $52,466. Beginning and ending balances for the year for selected accounts are as follows: Account
During the year, Hepworth Company earned a net income of $52,466. Beginning and ending balances for the year for selected accounts are as follows: Account Beginning Ending Cash $91,800 $107,610 Accounts receivable 57,375 84,788 Inventory 30,600 44,625 Prepaid expenses 22,950 25,500 Accumulated depreciation 68,850 77,775 Accounts payable 38,250 46,856 Wages payable 22,950 12,750 There were no financing or investing activities for the year. The above balances reflect all of the adjustments needed to adjust net income to operating cash flows. 1. Prepare a schedule of operating cash flows using the indirect method. Use a minus sign to indicate a cash outflow or a negative adjustment amount. 2. Suppose that all the data used in Requirement 1 except that the ending accounts payable and cash balances are not known. Assume also that you know that the operating cash flow for the year was $20,475. What is the ending balance of accounts payable?
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