The current sections of Donny Inc.\'s balance sheets at December 31, 2016 and 20

Question

The current sections of Donny Inc.'s balance sheets at December 31, 2016 and 2017, are presented here. Donny's net income for 2017 was $203,000. Depriciation expense was $25,000.

Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2017, using the indirect method. Use pararentheses for deductions.

2016 2017 Current Assests Cash $115,000 $99,000 Accounts Receivable 105,000 89,000 Inventory 154,000 172,000 Prepaid Expense 27,000 21,000 Total Current Assets $401,00 $381,000 Current Liabilities Accrued Expenses Payable $15,000 $5,000 Accounts Payable 85,000 93,000 Total Current Liabilities $100,000 $98,000

Explanation / Answer

Cash flow from Operating activities:

Net Income                                $ 203,000   

Adjustments:

           Depreciatioin          25,000

           Decrease in Receivables                 16,000

           Increase in inventory                      (18,000)

           Decrease in prepaid exp         6,000       

   Decrease in accrued exp    (10,000)

   Increase in accounts payable    8,000 27,000

Net Cash provided by Operating activities                 2,30,000 $

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