The net income reported on the income statement for the current year was $128,000. Depreciation recorded on store equipment for the year amounted to $21,100. 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$51,200 $47,100 Accounts receivable (net)36,710 34,810 Merchandise inventory50,120 52,990 Prepaid expenses5,630 4,470 Accounts payable (merchandise creditors)47,970 44,560 Wages payable26,210 29,110 ii) Express quantitative information to show an understanding, and or purposes of your work by for instance explaining why net cash flows from operating activities is different from net income.

Question
Asked Oct 31, 2019

The net income reported on the income statement for the current year was $128,000. Depreciation recorded on store equipment for the year amounted to $21,100. 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

$51,200

 

$47,100

 

Accounts receivable (net)

36,710

 

34,810

 

Merchandise inventory

50,120

 

52,990

 

Prepaid expenses

5,630

 

4,470

 

Accounts payable (merchandise creditors)

47,970

 

44,560

 

Wages payable

26,210

 

29,110

 

ii) Express quantitative information to show an understanding, and or purposes of your work by for instance explaining why net cash flows from operating activities is different from net income.

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Expert Answer

Step 1
Statement of cash flows: It is one of the financial statement that shows
the cash and cash equivalents of a company for a particular period. It
determines the net changes in cash through reporting the sources and
uses of cash due to the operating, investing, and financing activities of a
company
Indirect method: Under this method, the following amounts are to be
adjusted from the Net Incometo calculate the net cash provided from
operating activities.
Cash flows from operating activities: These are the cash produced by
the normal business operations.
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Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company Indirect method: Under this method, the following amounts are to be adjusted from the Net Incometo calculate the net cash provided from operating activities. Cash flows from operating activities: These are the cash produced by the normal business operations.

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