The net income reported on the income statement for the current
year was $128,800. Depreciation recorded on store equipment for the
year amounted to $21,300. 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 |
$49,970 |
|
$45,470 |
|
| Accounts receivable (net) |
35,830 |
|
33,600 |
|
| Merchandise inventory |
48,920 |
|
51,150 |
|
| Prepaid expenses |
5,500 |
|
4,320 |
|
| Accounts payable (merchandise creditors) |
46,820 |
|
43,010 |
|
| Wages payable |
25,580 |
|
28,100 |
|
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: |
|
|
| Net income |
$ |
|
| Adjustments to reconcile net income to net cash flow from
operating activities: |
|
|
| Depreciation |
|
|
| Changes in current operating assets and liabilities: |
|
|
| Increase in accounts receivable |
|
|
| Decrease in merchandise inventory |
|
|
| Increase in prepaid expenses |
|
|
| Increase in accounts payable |
|
|
| Decrease in wages payable |
|
|
| Net cash flow from operating activities |
|
$ |
