Exercise 12-4 The current sections of Buffalo Corp.’s balance sheets at December
ID: 2590800 • Letter: E
Question
Exercise 12-4
The current sections of Buffalo Corp.’s balance sheets at December 31, 2016 and 2017, are presented here. Buffalo Corp.’s net income for 2017 was $155,448. Depreciation expense was $27,432.
2017
2016
$106,680
$ 100,584
81,280
90,424
170,688
174,752
27,432
22,352
$386,080
$388,112
$ 15,240
$ 5,080
86,360
93,472
$101,600
$ 98,552
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$106,680
$ 100,584
Accounts receivable81,280
90,424
Inventory170,688
174,752
Prepaid expenses27,432
22,352
Total current assets$386,080
$388,112
Current liabilities Accrued expenses payable$ 15,240
$ 5,080
Accounts payable86,360
93,472
Total current liabilities$101,600
$ 98,552
Explanation / Answer
Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net income 155448 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 27432 Decrease in Accounts receivable 9144 Decrease in Inventory 4064 Increase in Prepaid expenses -5080 Increase in Accrued expenses payable 10160 Decrease in Accounts payable -7112 38608 Net Cash Provided by Operating Activities 194056
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