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Instructions During the year. Hepworth Company earned a net income of $55,025. Beginning and ending balances for the year for selected accounts are as follows:
Instructions During the year. Hepworth Company earned a net income of $55,025. Beginning and ending balances for the year for selected accounts are as follows: Account Beginning Ending Cash $106.000 $125,100 Accounts receivable 87.200 99,250 Inventory 36,100 52,700 30,600 90,800 Prepaid expenses 26,700 Accumulated depreciation 81,300 Accounts payable 45,800 Wages payable 27.400 56.025 14.300 There were no financing or investing activities for the year. The above balances reflect all of the adjustments needed to adjust not income to operating cash flows. Required: 1. Prepare a schedule of operating cash flows using the indirect method. 2 Suppose that all the data used in Requirement except the ending accounts payable and cash balances are not known. Assume also that you know that the operating cash flow for the year was $20.275. What is the ending balance of accounts payable? 3. Conceptual Connections Hopworth has an opportunity to buy some oquloment that will significantly increase productivity. The equipment conto $25,000. Assuming exactly the same data used for Requirement 1, can Hepworth buy the equipment using this year's operating cash flows? Amount Descriptions Refer to the list below for the exact wording of an amount description within your Statement of Cash Flows. Amount Descriptions Decrease in accounts payable Decrease in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in wages payable Depreciation expense Increase in accounts payable Increase in accounts receivable Increase in inventory Increase in prepaid expenses Increase in wages payable Net cash from operating activities Net income Net loss Operating Cash Flows - Indirect Method 1. Prepare a schedule of operating cash flows using the indirect method. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Hepworth Company Schedule of Operating Cash Flows : Cash flows from operating activities 2 Aaduct) adjusting items . Final Questions 2. Suppose that all the data used in Requirement ? except the aviding accounts payable and cash barons are not known. Assume also that you know that the operating cash flow for the year was $20,278 What is the ending bintance of docounts payable? 3. Concrete Connection: Hepworthy has an opportunity to buy some equipment that wil significantly noroeso productivity. The equipment costs $25,000. Assuming exactly the same dute used for Requirement Icon Hepworth by the equipment using the year operating cash now? No Yes
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