The current sections of Pearl Corp.’s balance sheets at December 31, 2016 and 20

Question

The current sections of Pearl Corp.’s balance sheets at December 31, 2016 and 2017, are presented here. Pearl Corp.’s net income for 2017 was $157,437. Depreciation expense was $27,783. 2017 2016 Current assets Cash $108,045 $ 101,871 Accounts receivable 82,320 91,581 Inventory 172,872 176,988 Prepaid expenses 27,783 22,638 Total current assets $391,020 $393,078 Current liabilities Accrued expenses payable $ 15,435 $ 5,145 Accounts payable 87,465 94,668 Total current liabilities $102,900 $ 99,813 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).)

Explanation / Answer

Answer:-

Pearl Corp's Cash Flow statement (Using Indirect Method) Particulars Amount $ Net Income 157437 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 27783 Change in opreating assets & liabilities Decrease in Accounts Receiviable 9261 Decrease in Inventory 4116 Increase in Prepaid expense (5145) Decrease in Accounts payable (7203) Increase in Accrued expenses 10290 Net cash flow from opreating activities 196539

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