Cash Flow from Operating Activities (Indirect Method) The Arcadia Company owns no plant assets and had the following income statement for the year: Sales revenue $1,235,000 Cost of goods sold $871,000 Wages expense 273,000 Rent expense 54,600 Utilities expense 19,500 1,218,100 Net income $16,900 Additional information about the company includes: End of Year Beginning of Year Accounts receivable $83,200 $76,700 Inventory 78,000 111,800 Prepaid rent 10,400 9,100 Accounts payable 28,600 36,400 Wages payable 11,700 7,800 Use the preceding information to calculate the cash flow from operating activities using the indirect method. Remember to use negative signs with your answers when appropriate. Cash Flow from Operating Activities Net Income Answer Add (deduct) items to convert net income to cash basis Accounts Receivable AnswerIncreaseDecrease Answer Inventory AnswerIncreaseDecrease Answer Prepaid Rent AnswerIncreaseDecrease Answer Accounts Payable AnswerIncreaseDecrease Answer Wages Payable AnswerIncreaseDecrease Answer Cash Provided by Operating Activities Answer
Cash Flow from Operating Activities (Indirect Method) The Arcadia Company owns no plant assets and had the following income statement for the year: Sales revenue $1,235,000 Cost of goods sold $871,000 Wages expense 273,000 Rent expense 54,600 Utilities expense 19,500 1,218,100 Net income $16,900 Additional information about the company includes: End of Year Beginning of Year Accounts receivable $83,200 $76,700 Inventory 78,000 111,800 Prepaid rent 10,400 9,100 Accounts payable 28,600 36,400 Wages payable 11,700 7,800 Use the preceding information to calculate the cash flow from operating activities using the indirect method. Remember to use negative signs with your answers when appropriate. Cash Flow from Operating Activities Net Income Answer Add (deduct) items to convert net income to cash basis Accounts Receivable AnswerIncreaseDecrease Answer Inventory AnswerIncreaseDecrease Answer Prepaid Rent AnswerIncreaseDecrease Answer Accounts Payable AnswerIncreaseDecrease Answer Wages Payable AnswerIncreaseDecrease Answer Cash Provided by Operating Activities Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The Arcadia Company owns no plant assets and had the following income statement for the year:
| Sales revenue | $1,235,000 | |
| Cost of goods sold | $871,000 | |
| Wages expense | 273,000 | |
| Rent expense | 54,600 | |
| Utilities expense | 19,500 | 1,218,100 |
| Net income | $16,900 |
Additional information about the company includes:
| End of Year |
Beginning of Year |
|
|---|---|---|
| $83,200 | $76,700 | |
| Inventory | 78,000 | 111,800 |
| Prepaid rent | 10,400 | 9,100 |
| Accounts payable | 28,600 | 36,400 |
| Wages payable | 11,700 | 7,800 |
Use the preceding information to calculate the cash flow from operating activities using the indirect method.
Remember to use negative signs with your answers when appropriate.
| Cash Flow from Operating Activities | |||
|---|---|---|---|
| Net Income | Answer
|
||
| Add (deduct) items to convert net income to cash basis | |||
| Accounts Receivable | AnswerIncreaseDecrease
|
Answer
|
|
| Inventory | AnswerIncreaseDecrease
|
Answer
|
|
| Prepaid Rent | AnswerIncreaseDecrease
|
Answer
|
|
| Accounts Payable | AnswerIncreaseDecrease
|
Answer
|
|
| Wages Payable | AnswerIncreaseDecrease
|
Answer
|
|
| Cash Provided by Operating Activities | Answer
|
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