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Question

ew History Bookmarks People Window Help × WileyPLUS edugen.wileyplus.com/edugen/student/mainfr.uni WileyPLUS Weygandt, Financial Accounting, 10e Gradebook ORION Downloadable eTextboolk ent CALCULATOR MESSAGEMY INSTRUCTOR FULL SCR Exercise 12-5 The current sections of Scoggin Inc.'s balance sheets at December 31, 2018 and 2019, are presented here. Scoggin's net income for 2019 was $153,000. Depreciation expense was $24,000. 2019 2018 Current assets Cash Accounts receivable Inventory Prepaid expenses $105,000 110,000 158,000 27,000 400,000 $99,000 89,000 172,000 22,000 $382,000 Total current assets Current liabilities $5,000 92,000 $97,000 $15,000 Accrued expenses payable Accounts payable 85,000 100,00059 Total current liabilities Prepare the net cash provided by operating activities section of the company's statement of cash flows for the ye the indirect method. (Show amounts that decrease cash flow with either a -sign e.g.-15,000 or in pare Scoggin Inc.

Explanation / Answer

Solution:

Scoggin Inc.

Partial Statement of Cash Flows

For the Year Ended December 31, 2019

Cash Flows from Operating Activities

Net Income

$153,000

Adjustments to reconcile net income to

Change in Current Assets and Current Liabilities or Working Capital:

(+) Depreciation Expense

24000

(+) Increase in Accounts Receivable (110,000 - 89,000)

21000

(-) Decrease in Inventory (172,000 - 158,000)

-14000

(+) Increase in Prepaid Expenses (27,000 - 22,000)

5000

(-) Increase in Accrued Expenses Payable ($15,000 - 5,000)

-10000

(+) Decrease in Accounts Payable (92,000 - 85,000)

7000

9000

Cash generated from Operating Activities

162000

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