QUESTION 3 Partially correct 2.75 points out of 3.00 Flag question Cash Flow fro

Question

QUESTION 3 Partially correct 2.75 points out of 3.00 Flag question Cash Flow from Operating Activities (Indirect Method) The Arcadia Company owns no plant assets and had the following income statement for the year: Sales revenue $1,235,000 $871,000 273,000 54,600 Cost of goods sold Wages exp ense Rent expense Utilities expense 9,500 1,218,100 Net income $16,900 Additional information about the company includes End of Year Beginning of Year Accounts receivable $83,200 Inventory Prepaid rent Accounts payable 28,600 Wages payable $76,700 111,800 9,100 36,400 7,800 78,000 10,400 11,700 Use the preceding information to calculate the cash flow from operating activities using the indirect method Remember to use negative signs with your answers when appropriate Cash Flow from Operating Activities Net Income 16,900 Add (deduct) items to convert net income to cash basis Accounts Receivable Increase (6,500) 33,800 (1,300) (7,800) 3,900 Inventory Decrease Prepaid Rent Increase Accounts Payable Decrease Wages Payable Increase 46,800 X Cash Provided by Operating Activities

Explanation / Answer

Answer:-

Arcadia Company Statement of Cash Flow (Using Indirect Method) Partial For the year ended Particulars Amount $ Cash flow from opreating activities Net Income 16900 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Change in opreating assets & liabilities Increase in accounts receivable -6500 Decrease in inventory 33800 Increase in prepaid rent -1300 Decrease in accounts payable -7800 Increase in wages payable 3900 Net cash flow from opreating activities (a) 39000

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