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Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $150,300. Depreciation recorded on store equipment for the year amounted to $24,800. 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 $58,770 $54,070 Accounts receivable (net) 42,140 39,960 Merchandise inventory 57,540 60,830 Prepaid expenses 6,460 5,140 Accounts payable (merchandise creditors) 55,070 51,150 Wages payable 30,090 33,420 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities:

Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $150,300. Depreciation recorded on store equipment for the year amounted to $24,800. 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 $58,770 $54,070 Accounts receivable (net) 42,140 39,960 Merchandise inventory 57,540 60,830 Prepaid expenses 6,460 5,140 Accounts payable (merchandise creditors) 55,070 51,150 Wages payable 30,090 33,420 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $150,300. Depreciation recorded on store equipment for the year amounted to $24,800. 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 $58,770 $54,070 Accounts receivable (net) 42,140 39,960 Merchandise inventory 57,540 60,830 Prepaid expenses 6,460 5,140 Accounts payable (merchandise creditors) 55,070 51,150 Wages payable 30,090 33,420 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: JOO
Transcribed Image Text:Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $150,300. Depreciation recorded on store equipment for the year amounted to $24,800. 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 $58,770 $54,070 Accounts receivable (net) 42,140 39,960 Merchandise inventory 57,540 60,830 Prepaid expenses 6,460 5,140 Accounts payable (merchandise creditors) 55,070 51,150 Wages payable 30,090 33,420 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: JOO
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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when
Transcribed Image Text: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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when
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