Use the following information for the Problems below. Lansing Company’s 2017 inc
ID: 2550050 • Letter: U
Question
Use the following information for the Problems below.
Lansing Company’s 2017 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2016 and 2017, follow.
Problem 16-1A Indirect: Computing cash flows from operations LO P2
Required:
Prepare the cash flows from operating activities section only of the company’s 2017 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Income Statement
For Year Ended December 31, 2017 Sales revenue $ 148,200 Expenses Cost of goods sold 59,000 Depreciation expense 20,500 Salaries expense 35,000 Rent expense 10,700 Insurance expense 5,500 Interest expense 5,300 Utilities expense 4,500 Net income $ 7,700
Explanation / Answer
LANSING COMPANY
Cash Flows from Operating Activities For Year Ended December 31, 2017
(Indirect Method)
Cash flows from operating activities:
Net income $ 7,700
Adjustments ;
Depreciation expense $ 20,500
Decrease in Accounts receivable $ 1,900
Increase in Inventory ($ 1290)
Decrease in Accounts payable ($ 1900)
Increase in Salaries payable $ 350
Increase in Utilities payable $ 230
Decrease in Prepaid insurance $ 190
Increase in Prepaid rent ($ 210) $ 19,770
Net cash provided by operating activities $ 27,470
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