The net income reported on the income statement for the current year was $142,900. Depreciation recorded on store equipment for the year amounted to $23,600. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of YearBeginning of YearCash$55,020 $50,070 Accounts receivable (net)39,450 37,000 Inventories53,860 56,330 Prepaid expenses6,050 4,760 Accounts payable (merchandise creditors)51,550 47,370 Wages payable28,170 30,940 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 $

Statement of cash flows:This statement reports all the cash transactions which are responsible for…

Answered: The net income reported on the income…

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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The net income reported on the income statement for the current year was $142,900. Depreciation recorded on store equipment for the year amounted to $23,600. 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	$55,020		$50,070
Accounts receivable (net)	39,450		37,000
Inventories	53,860		56,330
Prepaid expenses	6,050		4,760
Accounts payable (merchandise creditors)	51,550		47,370
Wages payable	28,170		30,940

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		$

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