The income statement and selected balance sheet information for Hamburger Heaven

Question

The income statement and selected balance sheet information for Hamburger Heaven for the year ended December 31, 2015, are presented below Income Statement $ 2,060 Sales Revenue Expenses Cost of Goods Sold Depreciation Expense Salaries and Wages Expense Rent Expense Insurance Expense Interest Expense Utilities Expense 900 200 500 250 80 60 50 Net Income $20 Selected Balance Sheet Accounts Inventory Accounts Receivable Accounts Payable Salaries and Wages Payable Utilities Payable Prepaid Rent Prepaid Insurance 2015 2014 $ 82 $ 60 380 450 200210 20 60 10 5 29 20 2 TIP: Prepaid Rent decreased in 2015 because the amount taken out of Prepaid Rent (and subtracted from net income as Rent Expense) was more than the amount paid for rent in cash during 2015

Explanation / Answer

Hamburger Heaven Statement of cash flows (Partial) For the year ended December 31, 2015 Cash flows from operating activities: Net Income $   20 Adjustment to reconcile net income to net cash provided by operating activities Depreciation expense $ 200 Decrease in accounts receivable $   70 Increase in inventory $ -22 Decrease in prepaid rent $      8 Increase in prepaid insurance $    -9 Decrease in accounts payable $ -10 Increase in salaries and wages payable $      9 Decrease in utilities payable $ -40 Total adjustments $ 206 Net cash provided by operating activities $ 226

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