#### Chapter 16The net income reported on the income statement for the current year was $183,000. Depreciation recorded on equipment and a building amounted to $76,500 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** | $65,000 | $54,500 || **Accounts receivable (net)** | $75,000 | $72,500 || **Inventories** | $175,000 | $165,500 || **Prepaid Expenses** | $8,500 | $9,200 || **Accounts Payable (merchandise creditors)** | $75,450 | $70,650 || **Salaries Payable** | $11,500 | $8,600 |**Tasks:**1. **Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method.**2. **If the direct method had been used, would the net cash flow from operating activities have been the same? Explain.**---The provided table lists the balances at the end and the beginning of the year for various accounts, including cash, accounts receivable, inventories, prepaid expenses, accounts payable, and salaries payable.Here is a step-by-step explanation of the tasks:**Task a: Preparing Cash Flows from Operating Activities (Indirect Method)**1. **Start with the Net Income**: Begin with the net income of $183,000.2. **Add Non-Cash Expenses**: Add back the depreciation of $76,500.3. **Adjust for Changes in Working Capital**: - **Accounts Receivable**: ($75,000 - $72,500) = increase of $2,500. - **Inventories**: ($175,000 - $165,500) = increase of $9,500. - **Prepaid Expenses**: ($8,500 - $9,200) = decrease of $700. - **Accounts Payable**: ($75,450 - $70,650) = increase of $4,800. - **Salaries Payable**: ($11,500 - $8,600

The cash flow statement is prepared to record the cash flow from various activities during the…

mapter 16 e net income reported on the income statement for the current year was $183,000. Depreciation recorded on equipment and a wilding amounted to $76,500 for the year. Balances of the current asset and current liability accounts at the begining and end of the ar are as follows: End of Year Beginning of Year sh 65,000 54,500 counts receivable (net) 75,000 72,500 ventories 175,600 165,500 epaid Expenses 8,500 9,200 75,450 counts Payable (merchandise creditors) laries Payable I 70,650 8,600 11,500 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. If the direct method had been used, would the net cash flow from operating activities have been the same? Explain. $ $

mapter 16 e net income reported on the income statement for the current year was $183,000. Depreciation recorded on equipment and a wilding amounted to $76,500 for the year. Balances of the current asset and current liability accounts at the begining and end of the ar are as follows: End of Year Beginning of Year sh 65,000 54,500 counts receivable (net) 75,000 72,500 ventories 175,600 165,500 epaid Expenses 8,500 9,200 75,450 counts Payable (merchandise creditors) laries Payable I 70,650 8,600 11,500 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. If the direct method had been used, would the net cash flow from operating activities have been the same? Explain. $ $

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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Original Cost POST. ... Accumulated Depreciation for Previous Years DATE DESCRIPTION REF. DEBIT CREDIT ... Book Value, Beginning Year 4 1 20xx ... Salvage Value 2 2. ... Revised Remaining Depreciation Cost 3 ... 4 Revised Useful Life 15 YEARS Revised Depreciation, Total Revised Depreciation, Per Year ...
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