1. The net income reported on the income statement for the current year was $230,400. Depreciation recorded on equipment and a building amounted to $68,900 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

   	End of Year		Beginning of Year
   Cash	$59,670		$62,650
   Accounts receivable (net)	75,660		77,310
   Inventories	149,180		133,190
   Prepaid expenses	8,290		8,830
   Accounts payable (merchandise creditors)	66,650		69,920
   Salaries payable	9,610		8,710

   a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

   Statement of Cash Flows (partial)
   Cash flows from operating activities:
   	$fill in the blank 0ef40efa306e021_2
   Adjustments to reconcile net income to net cash flow from operating activities:
   	fill in the blank 0ef40efa306e021_4
   Changes in current operating assets and liabilities:
   	fill in the blank 0ef40efa306e021_6
   	fill in the blank 0ef40efa306e021_8
   	fill in the blank 0ef40efa306e021_10
   	fill in the blank 0ef40efa306e021_12
   	fill in the blank 0ef40efa306e021_14
   Net cash flow from operating activities		$fill in the blank 0ef40efa306e021_15

   b. If the direct method had been used, would the net cash flow from operating activities have been the same?

Check My Work5 more Check My Work uses remaining.

• Previous
• Next