4. (5 points) Hitchcock Exhibit Use the following selected date and additional i

Question

4. (5 points) Hitchcock Exhibit Use the following selected date and additional information from the records of Hitchcock Corporation answer the question that follows. 2003 $50,000 $40,000 2004 Accounts Receivable Inventories Prepaid Rent Accounts payable Salaries payable Taxes payable 22,000 13,000 13,000 5,000 20,000 9,000 18,000 15,000 11,000 Depreciation Expense Net Income 2004 6,000 50,000 Required: Prepare the Operating Activities section of the Statement of Cash Flows for the year ended 2004. Use the INDIRECT Method.

Explanation / Answer

Hitchcock Statement of cash flows for 2004 Net Income 50000 Add : Depreciation 6000 Operating cash flow before working capital changes 56000 Increase in Accounts Receivable -10000 Decrease in Inventory 3000 Increase in Prepaid Rent -8000 Decrease in Accounts payable -7000 Decrease in salary payable -6000 Increase in tax payable 7000 Cash from Operating Activities 35000 As per Chegg policy, we are supposed to answer maximum of one problem at a time Thank You

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