Gutierrez Company reported net income of $192,850 for 2015. Gutierrez also repor

Question

Gutierrez Company reported net income of $192,850 for 2015. Gutierrez also reported depreciation expense of $42,900 and a loss of $5,010 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,560 for the year, a $19,210 increase in accounts payable, and a S4,380 decrease in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2015. Use the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

Gutierrez Company Partial Statement of Cash Flows For the year ended Dec.31,2015 Cash Flows from Operating Activities Net Income 192850 Add:Adjustments to reconcile net income to Net Cash provided by Opearting activities Non-cash items: Depreciation Expense 42900 Loss on disposal of Equipment 5010 47910 240760 Add: Decrease in Accounts Receivables 15560 Add: Increase in Accounts Payables 19210 Add: Decrease in Prepaid Expenses 4380 Cash Provided by Operating Activities 279910

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