A) Peach Computer reports net income of $158,000. Included in net income is a ga

Question

A)

Peach Computer reports net income of $158,000. Included in net income is a gain on the sale of land of $16,500. A comparison of this year’s and last year’s balance sheets reveals an increase in accounts receivable of $28,000, an increase in inventory of $16,500, and a decrease in accounts payable of $48,000.

Prepare the operating activities section of the statement of cash flows for Peach Computer using theindirect method. (List cash outflows and any decrease in cash as negative amounts.)

Peach Computer reports net income of $158,000. Included in net income is a gain on the sale of land of $16,500. A comparison of this year’s and last year’s balance sheets reveals an increase in accounts receivable of $28,000, an increase in inventory of $16,500, and a decrease in accounts payable of $48,000.

Explanation / Answer

A) Cash flow from operating Income Net Income 158000 Less Gain on disposal of land 16500 Increase in accounts receivable 28000 Decrease in accounts payable 48000 Increase in inventory 16500 109000 Net cash flow from operating activity 49000 B) Cash flow from operating Income Net Income 73000 Add Depriciation 41000 Decrease in accounts receivable 6600 Decrease in prepaid rent 1100 Increase in accounts payable 3500 52200 Less Increase in inventory 15500 Decrease in income tax payable 1400 16900 Net cash flow from operating activity 108300

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.