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Social ScienceThe 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.
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.
Expert Answer
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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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