Question 3 Gutierrez Company reported net income of $194,700 for 2017. Gutierrez

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Question 3

Gutierrez Company reported net income of $194,700 for 2017. Gutierrez also reported depreciation expense of $47,700 and a loss of $4,900 on disposal of equipment. The comparative balance sheet shows an decrease in accounts receivable of $19,900 for the year, a $21,900 increase in accounts payable, and a $3,200 decrease in prepaid expenses.

Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Adjustments to reconcile net income to

GUTIERREZ COMPANY
Partial Statement of Cash Flows

For the Year Ended December 31, 2017For the Month Ended December 31, 2017December 31, 2017

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

    Decrease in Prepaid Expenses    Increase in Prepaid Expenses    Loss on Disposal of Equipment    Decrease in Accounts Receivable    Net Income    Increase in Accounts Payable    Decrease in Accounts Payable    Depreciation Expense    Increase in Accounts Receivable    

$

Adjustments to reconcile net income to

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

    Decrease in Prepaid Expenses    Depreciation Expense    Net Income    Increase in Accounts Payable    Loss on Disposal of Equipment    Decrease in Accounts Receivable    Decrease in Accounts Payable    Increase in Prepaid Expenses    Increase in Accounts Receivable    

$

    Net Income    Decrease in Accounts Receivable    Increase in Prepaid Expenses    Increase in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Loss on Disposal of Equipment    Increase in Accounts Payable    Decrease in Accounts Payable    

    Loss on Disposal of Equipment    Increase in Prepaid Expenses    Increase in Accounts Payable    Depreciation Expense    Decrease in Accounts Payable    Increase in Accounts Receivable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Net Income    

    Depreciation Expense    Decrease in Accounts Receivable    Increase in Prepaid Expenses    Decrease in Prepaid Expenses    Net Income    Loss on Disposal of Equipment    Increase in Accounts Payable    Decrease in Accounts Payable    Increase in Accounts Receivable    

    Increase in Accounts Receivable    Loss on Disposal of Equipment    Net Income    Decrease in Accounts Receivable    Increase in Prepaid Expenses    Depreciation Expense    Decrease in Accounts Payable    Decrease in Prepaid Expenses    Increase in Accounts Payable    

    Cash at Beginning of Period    Cash at End of Period    Cash Flows from Financing Activities    Cash Flows from Investing Activities    Cash Flows from Operating Activities    Net Cash Provided by Financing Activities    Net Cash Provided by Investing Activities    Net Cash Provided by Operating Activities    Net Cash Used by Financing Activities    Net Cash Used by Investing Activities    Net Cash Used by Operating Activities    Net Decrease in Cash    Net Increase in Cash    

$

Explanation / Answer

Cash Flow From Operating activities ( Indirect Method) $ Net Income 194700 Add: Depreciation expenses 47700 Loss on disposal of equipment 4900 Add: Drcrease in Account Receivable ( Current Assets) 19900 Increase in Account Payable ( Cuurent Liab) 21900 Drcrease in Prepaid Expenses ( Current Assets) 3200 Net Cash Flow from Operating Activities 292300 Note For Change in Working Capital Increase Decrease Chnage in Current Asets Less Add Change In Current Liab Add Less

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