Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $153,600. Depreciation recorded on store equipment for the year amounted to $25,300. 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 $59,440 $54,680 Accounts receivable (net) 42,620 40,410 Merchandise inventory 58,190 61,520 Prepaid expenses 6,540 5,190 Accounts payable (merchandise creditors) 55,700 51,730 Wages payable 33,790 30,430 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 (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

Question
Cash Flows from Operating Activities-Indirect Method
The net income reported on the income statement for the current year was $153,600. Depreciation recorded on store equipment for the year amounted to $25,300.
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
$59,440
$54,680
Accounts receivable (net)
42,620
40,410
Merchandise inventory
58,190
61,520
Prepaid expenses
6,540
5,190
Accounts payable (merchandise creditors)
55,700
51,730
Wages payable
33,790
30,430
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

Image Transcription

Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $153,600. Depreciation recorded on store equipment for the year amounted to $25,300. 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 $59,440 $54,680 Accounts receivable (net) 42,620 40,410 Merchandise inventory 58,190 61,520 Prepaid expenses 6,540 5,190 Accounts payable (merchandise creditors) 55,700 51,730 Wages payable 33,790 30,430 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 (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

Image Transcription

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

Expert Answer

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Kayak Co. budgeted the following cash recelpts (excluding cash recelpts from loans recelved) and cas...

A: Cash budgets are prepared to determine the inflow and outflow of cash during a given period.

Q: Name of Budgeted Cost Budgeted Cost Plant insurance $ 86,100   Testing raw materials   45,000   ...

A: Definition of Budgeted Cost:Budgeted Cost are refer as an estimated expenses that company expected t...

Q: How do I make an income statement?

A: Income statement depicts the net profit earned or loss suffered by the organization over a period of...

Q: Suppose an investment will pay $11,000 in 41 years from now. If you can earn 14.55% interest compoun...

A: Calculate the present value of investment.

Q: You are a partner in a CPA firm. Some of your partners have conservative views and some don't. You a...

A: Certified Public Accountant (CPA): The Certified Public Accountant (CPA) refer to the proficient and...

Q: On January 15, 2017, before the December 31,2016 balance sheet was issued, a building with a cost of...

A: A subsequent event is an event that occurs after the balance sheet date but before the financial sta...

Q: Explain what a manager might find useful information from their comppany's income statement and bala...

A: In planning and carrying out an advertising campaign, management needs to know the past advertising ...

Q: TRIAL balance dated Dec 31, 2019 MUSIC-IS-US, INCTRIAL BALANCEDECEMBER 31, 2018 cash ………………………………………...

A: Click to see the answer

Q: Scenario: It's 12/31 and I'm doing financial statement accounting adjustments. On October 1st, my co...

A: First of all, we will see the calculations with respect to borrowings made-Bank borrowing through no...