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

ID: 2588433 • Letter: T

Question

The current sections of Monty Corp.’s balance sheets at December 31, 2016 and 2017, are presented here. Monty Corp.’s net income for 2017 was $166,464. Depreciation expense was $29,376.

2017

2016

$114,240

$ 107,712

87,040

96,832

182,784

187,136

29,376

23,936

$413,440

$415,616

$ 16,320

$ 5,440

92,480

100,096

$108,800

$ 105,536

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

$114,240

$ 107,712

Accounts receivable

87,040

96,832

Inventory

182,784

187,136

Prepaid expenses

29,376

23,936

Total current assets

$413,440

$415,616

Current liabilities Accrued expenses payable

$ 16,320

$ 5,440

Accounts payable

92,480

100,096

Total current liabilities

$108,800

$ 105,536

Explanation / Answer

Cash flow statement for the year ended December 31,2017

cash flow from operating activities

Net income

$166,464

adjustments to reconcile net income to net cash provided by operating activities:

depreciation expense

$29,376

decrease in inventory

$4,352

increase in accrued expense payable

$10,880

decrease in accounts receivable

$9,792

increase in prepaid expenses

($5,440)

decrease in accounts receivables

($7,616)

$41,344

net cash provided by operating activities

$207,808