Sosa Company reported net income of $190,000 for 2017. Sosa Company also reporte

Question

Sosa Company reported net income of $190,000 for 2017. Sosa Company also reported depreciation expense of $35,000 and a loss of $5,000 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 increase 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).)

Adjustments to reconcile net income to

Sosa Company
Partial Statement of Cash Flows

December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

    Decrease in Accounts Payable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Gain on Disposal of Plant Assets    Increase in Accounts Payable    Increase in Accounts Receivable    Increase in Prepaid Expenses    Loss on Disposal of Plant Assets    Net Income    

$

Adjustments to reconcile net income to

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

    Decrease in Accounts Payable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Gain on Disposal of Plant Assets    Increase in Accounts Payable    Increase in Accounts Receivable    Increase in Prepaid Expenses    Loss on Disposal of Plant Assets    Net Income    

$

    Decrease in Accounts Payable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Gain on Disposal of Plant Assets    Increase in Accounts Payable    Increase in Accounts Receivable    Increase in Prepaid Expenses    Loss on Disposal of Plant Assets    Net Income    

    Decrease in Accounts Payable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Gain on Disposal of Plant Assets    Increase in Accounts Payable    Increase in Accounts Receivable    Increase in Prepaid Expenses    Loss on Disposal of Plant Assets    Net Income    

    Decrease in Accounts Payable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Gain on Disposal of Plant Assets    Increase in Accounts Payable    Increase in Accounts Receivable    Increase in Prepaid Expenses    Loss on Disposal of Plant Assets    Net Income    

    Decrease in Accounts Payable    Decrease in Accounts Receivable    Decrease in Prepaid Expenses    Depreciation Expense    Gain on Disposal of Plant Assets    Increase in Accounts Payable    Increase in Accounts Receivable    Increase in Prepaid Expenses    Loss on Disposal of Plant Assets    Net Income    

    Cash at Beginning of Period    Cash at End of Period    Cash Flows from Financing Activities    Cash Flows from Investing Activities    Cash Flows from Operating Activities    Net Cash Provided by Financing Activities    Net Cash Provided by Investing Activities    Net Cash Provided by Operating Activities    Net Cash used by Financing Activities    Net Cash used by Investing Activities    Net Cash used by Operating Activities    Net Decrease in Cash    Net Increase in Cash    

$

Explanation / Answer

Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities: Net income 190000 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 35000 Loss on Disposal of Plant Assets 5000 Increase in accounts receivable -15000 Increase in accounts payable 17000 Increase in prepaid expenses -4000 38000 Net Cash Provided by Operating Activities 228000

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