Hardware Suppliers reports net income of $165,000. Included in net income is a gain on the sale of land of $20,000. A comparison of this year’s and last year’s balance sheets reveals an increase in accounts receivable of $35,000, an increase in inventory of $20,000, and a decrease in accounts payable of $55,000.Required:Prepare the operating activities section of the statement of cash flows using the indirect method. Do you see a pattern in Hardware Suppliers’ adjustments to net income to arrive at operating cash flows? What might this imply?
Hardware Suppliers reports net income of $165,000. Included in net income is a gain on the sale of land of $20,000. A comparison of this year’s and last year’s balance sheets reveals an increase in accounts receivable of $35,000, an increase in inventory of $20,000, and a decrease in accounts payable of $55,000.Required:Prepare the operating activities section of the statement of cash flows using the indirect method. Do you see a pattern in Hardware Suppliers’ adjustments to net income to arrive at operating cash flows? What might this imply?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter21: The Statement Of Cash Flows
Section: Chapter Questions
Problem 5RE: In the current year, Harrisburg Corporation had net income of 35,000, a 9,000 decrease in accounts...
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Hardware Suppliers reports net income of $165,000. Included in net income is a gain on the sale of land of $20,000. A comparison of this year’s and last year’s balance sheets reveals an increase in
Required:
Prepare the operating activities section of the statement of cash flows using the indirect method. Do you see a pattern in Hardware Suppliers’ adjustments to net income to arrive at operating cash flows? What might this imply?
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