Question
Operating Activities SectionIndirect Method The following account balances for the noncash current assets and current liabilities of Suffolk Company are available: December 31 2017 2016
Operating Activities SectionIndirect Method
The following account balances for the noncash current assets and current liabilities of Suffolk Company are available:
December 31 | |||
2017 | 2016 | ||
Accounts receivable | $43,260 | $35,320 | |
Inventory | 30,410 | 40,250 | |
Prepaid rent | 16,840 | 14,910 | |
Totals | $90,510 | $90,480 | |
Accounts payable | $26,220 | $19,330 | |
Income taxes payable | 5,880 | 9,660 | |
Interest payable | 15,410 | 12,130 | |
Totals | $47,510 | $41,120 |
Net income for 2017 is $41,850. Depreciation expense is $20,290. Assume that all sales and all purchases are on account.
Required:
1. Prepare the Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash.
Suffolk Company | |
Partial Statement of Cash Flows | |
For the Year Ended December 31, 2017 | |
Cash Provided by Operating Activities | |
$ | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ |
2. Net cash inflow from operating activities is $________ and the primary reason why it is higher than net income is ________ Other reasons for the higher amount of net cash inflow from operating activities are _________ and _________.
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