The current sections of Sanford Inc.’s balance sheets at December 31, 2013 and 2

ID: 2490749 • Letter: T

Question

The current sections of Sanford Inc.’s balance sheets at December 31, 2013 and 2014, are presented here. Sanford’s net income for 2014 was $347,616. Depreciation expense was $61,344.

2014

2013

$238,560

$ 224,928

181,760

202,208

381,696

390,784

61,344

49,984

$863,360

$867,904

$ 34,080

$ 11,360

193,120

209,024

$227,200

$ 220,384

Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2014, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in

2014

2013

Current assets Cash

$238,560

$ 224,928

Accounts receivable

181,760

202,208

Inventory

381,696

390,784

Prepaid expenses

61,344

49,984

Total current assets

$863,360

$867,904

Current liabilities Accrued expenses payable

$ 34,080

$ 11,360

Accounts payable

193,120

209,024

Total current liabilities

$227,200

$ 220,384

Explanation / Answer

Cash Flow from Operating Activities As on December 31,2014

Net Income

$347616

Depreciation Expense

$61344

Decrease in Accounts Receivables

$20448

Decrease in inventory

$9088

Increase in Prepaid Expenses

-$11360

Increase in Accrued Expenses Payable

$22720

Decrease in Accounts Payable

-$15904

$86336

Cash From Operating Activities

$433952