The net income reported on the income statement for the current year was $154,700. Depreciation recorded on store equipment for the year amounted to $25,500. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Wages payable End of Year Beginning of Year $63,120 $58,070 45,260 42,910 61,790 65,330 Cash flows from operating activities: 6,940 59,140 32,320 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) 5,520 54,930 35,890 Net cash flow from operating activities Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: 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
The net income reported on the income statement for the current year was $154,700. Depreciation recorded on store equipment for the year amounted to $25,500. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Wages payable End of Year Beginning of Year $63,120 $58,070 45,260 42,910 61,790 65,330 Cash flows from operating activities: 6,940 59,140 32,320 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) 5,520 54,930 35,890 Net cash flow from operating activities Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cash
Flows from Operating Activities-Indirect Method
The net income reported on the income statement for the current year was $154,700. Depreciation recorded on store equipment for the year amounted to $25,500. Balances of the current asset and current liability
accounts at the beginning and end of the year are as follows:
Cash
Accounts receivable (net)
Inventories
Prepaid expenses
Accounts payable (merchandise creditors)
Wages payable
End of Year Beginning of Year
$63,120
$58,070
45,260
42,910
61,790
65,330
5,520
54,930
35,890
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.
Cash flows from operating activities:
6,940
59,140
32,320
Statement of Cash Flows (partial)
Adjustments to reconcile net income to net cash flow from operating activities:
Net cash flow from operating activities
Changes in current operating assets and liabilities:
0000000
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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