The current sections of Larkspur, Inc.’s balance sheets at December 31, 2016 and
ID: 2560334 • Letter: T
Question
The current sections of Larkspur, Inc.’s balance sheets at December 31, 2016 and 2017, are presented here. Larkspur, Inc.’s net income for 2017 was $163,098. Depreciation expense was $28,782.
2017
2016
Current assets
Cash
$111,930
$ 105,534
Accounts receivable
85,280
94,874
Inventory
179,088
183,352
Prepaid expenses
28,782
23,452
Total current assets
$405,080
$407,212
Current liabilities
Accrued expenses payable
$ 15,990
$ 5,330
Accounts payable
90,610
98,072
Total current liabilities
$106,600
$ 103,402
Prepare the net cash provided (used) by operating activities section of the company’s statement of cash flows for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
2017
2016
Current assets
Cash
$111,930
$ 105,534
Accounts receivable
85,280
94,874
Inventory
179,088
183,352
Prepaid expenses
28,782
23,452
Total current assets
$405,080
$407,212
Current liabilities
Accrued expenses payable
$ 15,990
$ 5,330
Accounts payable
90,610
98,072
Total current liabilities
$106,600
$ 103,402
Explanation / Answer
Larkspur, Inc. Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net income 163098 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation expense 28782 Decrease in Accounts Receivable 9594 Decrease in Inventory 4264 Increase in Prepaid Expenses -5330 Increase in Accrued Expenses Payable 10660 Decrease in Accounts Payable -7462 40508 Net Cash Provided by Operating Activities 203606
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