Exercise 12-4 The current sections of Ayayai Corp.’s balance sheets at December

ID: 2587375 • Letter: E

Question

Exercise 12-4

The current sections of Ayayai Corp.’s balance sheets at December 31, 2016 and 2017, are presented here. Ayayai Corp.’s net income for 2017 was $168,453. Depreciation expense was $29,727.

2017

2016

Current assets

Cash

$115,605

$ 108,999

Accounts receivable

88,080

97,989

Inventory

184,968

189,372

Prepaid expenses

29,727

24,222

Total current assets

$418,380

$420,582

Current liabilities

Accrued expenses payable

$ 16,515

$ 5,505

Accounts payable

93,585

101,292

Total current liabilities

$110,100

$ 106,797

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).)

Exercise 12-4

The current sections of Ayayai Corp.’s balance sheets at December 31, 2016 and 2017, are presented here. Ayayai Corp.’s net income for 2017 was $168,453. Depreciation expense was $29,727.

2017

2016

Current assets

Cash

$115,605

$ 108,999

Accounts receivable

88,080

97,989

Inventory

184,968

189,372

Prepaid expenses

29,727

24,222

Total current assets

$418,380

$420,582

Current liabilities

Accrued expenses payable

$ 16,515

$ 5,505

Accounts payable

93,585

101,292

Total current liabilities

$110,100

$ 106,797

Explanation / Answer

CASH FLOW FOR YEAR 2017

Cash flow from operating activities

Net Income

168453

Add: Depreciation

29727

Add:

Decrease in Accounts Receivable

97989-88080

9909

Decrease in Inventory

189372-184968

4404

Increase in Accrued Expenses payable

16515-5505

11010

Less:

Increase in Prepaid Expense

24222-29727

-5505

Decrease in Accounts Payable

93585-101292

-7707

Net Cash flow from operating activities

210291