Question 1 Gutierrez Company reported net income of $193,400 for 2017. Gutierrez

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Question 1 Gutierrez Company reported net income of $193,400 for 2017. Gutierrez also reported depreciation expense of $45,600 and a loss of $6,000 on disposal of equipment. The comparative balance sheet shows an decrease in accounts receivable of $11,000 for the year, a $13,000 increase in accounts payable, and a $5,000 decrease in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2017. 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).,) GUTIERREZ COMPANY Partial Statement of Cash Flows Adjustments to reconcile net income to

Explanation / Answer

Particulars Amount($) Amount($) Cash flow from operating activities Net income 193400 Adjustments to reconcile net income to: Depreciaton expense 45600 Loss on disposal of equipment 6000 Decrease in AR 11000 Increase in AP 13000 Decrease in prepaid expenses 5000 $80600 Net cash flow from operating activiites $274000

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