The net income reported on the income statement for thecurrent year was $167,900

Question

The net income reported on the income statement for thecurrent year was $167,900. Depreciation recorded on equipmentand a building amounted to $41,300 for the year. Balances onthe current asset and current liability accounts at the beginningand end of the year are as follows:                                                                             Endof theyear                  Beginningof the year Cash                                                                    $27,900                            $30,900 Accounts receivable(net)                                       75,100                              70,250 Inventories                                                             120,400                           110,900 Prepaidexpenses                                                   5,800                                6,000 Accounts payable (merchandisecreditors)              67,200                              65,300 Salariespayable                                                     7,150                                7,950 INSTRUCTIONS:    Prepare the cash flowsfrom operating activities section of the statement ofcash flows, using the indirect method.   The net income reported on the income statement for thecurrent year was $167,900. Depreciation recorded on equipmentand a building amounted to $41,300 for the year. Balances onthe current asset and current liability accounts at the beginningand end of the year are as follows:                                                                             Endof theyear                  Beginningof the year Cash                                                                    $27,900                            $30,900 Accounts receivable(net)                                       75,100                              70,250 Inventories                                                             120,400                           110,900 Prepaidexpenses                                                   5,800                                6,000 Accounts payable (merchandisecreditors)              67,200                              65,300 Salariespayable                                                     7,150                                7,950 INSTRUCTIONS:    Prepare the cash flowsfrom operating activities section of the statement ofcash flows, using the indirect method.  

Explanation / Answer

$

Cash FlowStatement I. Cashflows from Operation Activities :

$

Net profit before tax and extraordinaryitems 167,900 Provision for: Add: Depreciation expense 41,300 Operating profit before Working Capitalcharges 209,200 Add:         Increase in accountspayable 1,900         Decrease in prepaidexpense 200 Less:Increase in inventories (9,500)         Increase in Accountsreceivable (4,850)         Decrease in salariespayable (800) (13,050) A. cash inflows from operatingactivities 196,150

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