he net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and urrent liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $23,500 $18,700 Accounts receivable (net) 56,000 48,000 Merchandise inventory 35,500 40,000 Prepaid expenses 4,750 7,000 Accounts payable (merchandise creditors) 21,800 16,800 Wages payable 4,900 5,800 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.
he net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and urrent liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $23,500 $18,700 Accounts receivable (net) 56,000 48,000 Merchandise inventory 35,500 40,000 Prepaid expenses 4,750 7,000 Accounts payable (merchandise creditors) 21,800 16,800 Wages payable 4,900 5,800 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Can you help me with increase in acccounts receivable l and decrease in wages payable?
Transcribed Image Text:The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. 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 | $23,500 | $18,700 |
| Accounts receivable (net) | 56,000 | 48,000 |
| Merchandise inventory | 35,500 | 40,000 |
| Prepaid expenses | 4,750 | 7,000 |
| Accounts payable (merchandise creditors) | 21,800 | 16,800 |
| Wages payable | 4,900 | 5,800 |
**Instructions:**
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:
**Net Income**
- Amount: $73,600 ✔️
**Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities:**
**Depreciation**
- Amount: $27,400 ✔️
### Changes in Current Operating Assets and Liabilities:
- **Increase in Accounts Receivable**
- Amount: [empty] ✖️
- **Decrease in Merchandise Inventory**
- Amount: $4,500 ✔️
- **Decrease in Prepaid Expenses**
- Amount: $2,250 ✔️
- **Increase in Accounts Payable**
- Amount: $5,000 ✔️
- **Decrease in Wages Payable**
- Amount: [empty] ✖️
---
**Net Cash Flow from Operating Activities**
- Amount: [empty]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F80626613-43e1-4911-8709-6fc1f0ea2156%2F088175e3-a226-4afb-b8bd-91cd1e050c91%2Fymxr7qk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:# Statement of Cash Flows (Partial)
## Cash Flows from Operating Activities:
**Net Income**
- Amount: $73,600 ✔️
**Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities:**
**Depreciation**
- Amount: $27,400 ✔️
### Changes in Current Operating Assets and Liabilities:
- **Increase in Accounts Receivable**
- Amount: [empty] ✖️
- **Decrease in Merchandise Inventory**
- Amount: $4,500 ✔️
- **Decrease in Prepaid Expenses**
- Amount: $2,250 ✔️
- **Increase in Accounts Payable**
- Amount: $5,000 ✔️
- **Decrease in Wages Payable**
- Amount: [empty] ✖️
---
**Net Cash Flow from Operating Activities**
- Amount: [empty]
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