Question

cash flows from operating activities - indirect method the net income reported

Cash Flows from Operating Activities - Indirect Method The net income reported on the income statement for the current year was $116,900. Depreciation recorded on store equipment for the year amounted to $19,300. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $47,810 $43,510 34,280 32,150 48,950 Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable 46,810 5,260 44.800 24.480 4,130 41,160 26,890 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the Indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcle net income to net cash flow from operating activities Changes in current operating assets and tables

Answer 1

rate positively .. if there are other options for the fill in the blanks than do let me know i will provide exact option.

ans b)
	Cash flow from operating activities			Amt	Amt		Working
	Net income			$      116,900
	Adjustment to reconcile net income to net cash flow from operating activities
	Depreciation			$         19,300
	Change in current operating asset and liabilities
	Increase in account receivable			$         (2,130)			32150-34280
	Decrease in inventory			$           2,140			48950-46810
	Increase in prepaid expenses			$         (1,130)			4130-5260
	Increase in account payable			$           3,640			44800-41160
	Decrease in wage payable			$         (2,410)			24480-26890
	Net cash flow from operating activities				$      136,310
ans b)	Cash flow from operating activities differ from net income because it does not use the ACCRUAL METHOD of accounting.
	For example revenue are recorded on the income statement when ACCRUED.