Instructions The net income reported on the income statement for the current year was $371,000. Depreciation recorded on store equipment for the year amounted to $16.880 Balances of the current asset and current ability accounts at the beginning and end of the year are as follows Cash Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Wages payable End of Year Beginning of Year $42,300 $40.040 29,570 28.890 39,370 45.670 3,520 4,990 35.430 40 340 22.090 24, 330 Required: n. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the Indirect method. Refer to the Amount Descriptions is provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, required. b. Brielly explain why net cash flow from operating activities is different than not income Amount Descriptions Amount Descriptions Amortization of intangible assets Decrease in accounts payable Decrease in accounts receivable Decrease in inventories Decrease in prepaid expenses Decrease in wages payable Depreciation Increase in accounts payable Increase in accounts receivable Increase in inventories Increase in prepaid expenses Increase in wages payable Net cash flow from operating activities Net cash flow used for operating activities Net income Net loss #. Prepare the Cash Flows from Operating Activites section of the statement of cash flows using the indirect method. Refer to the Amount Descriptions ist provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, required. 2 4 5 Statement of Cash Flows (partial) 1 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 receivables I increase in inventory Decrease in prepaid expenses decrease accounts payable increase in salaries payable 11 Net cash flow from operating activities 4 7 . . 30 Final Question Briefly explain why net cash flow from operating activities is different than not income. of accounting For example, revenues are recorded on the income statement Cash flows from operating activities differs from net income because it does not use the when The net income reported on the income statement for the current year was $371,000. Depreciation recorded on tore equipment for the year amounted to $16.880. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash End of Year Beginning of Year $42,300 $40,040 29.570 28,890 39,370 45,670 Accounts recolvable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Wages payable 4.990 3,520 40,340 35.430 22,090 24,330 Required: a Prepare the Cash Flows from Operating Activides section of the statement of cash flows using the indirect method. Refer to the Amount Descriptions ist provided for the exact wording of the answer choices for text entries. Use the bus sign to kidicate cash outflows, cash payments, decreases in cash and for any adjustments if required D. Brialy explain why net cash flow from operating activities is different than not come. Amount Descriptions Amortization of intangible assets Decrease in accounts payable Decrease in accounts receivable Decrease in inventories Decrease in prepaid expenses Decrease in wages payable Depreciation Increase in accounts payable Increase in accounts receivable Increase in inventories Increase in prepaid expenses Increase in wages payable Net cash flow from operating activities Net cash flow used for operating activities Net income Net loss a. Prepare the Cash Flows from Operating Activities section of the statement of cash lows, using the indirect method. Refer to the Amount Descriptions ist provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, required Statement of Cash Flows (partial 1 Cash flows from operating activities 2 Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: $ 7 decrease in accounts receivables Increase in inventory Decrease in prepaid expenses decrease accounts payable . . 30 increase in salaries payable 11 Net cash flow from operating activities Final Question b. Belly explain why net cash flow from operating activities in different income Cash flows from operating activities differs from net income because it does not use the when of accounting. For example, revenues are recorded on the income statement
