Question

Exercise 14-2 Net Cash Provided by Operating Activities (L014-2] For the just completed year, Hanna Company had net Income of $35,000. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows: December 31 End of Beginning Year of Year Current assets: Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Current liabilities: Accounts payable Accrued liabilities Income taxes payable $ 30,000 $ 40,000 $ 125,00 $ 106,00 $ 213,00 $ 180,000 $ 6,000 $ 7,000 $ 210,00 $ 4, eee $ 34,00 $ 195,00 $ 6,00 $ 30,000 The Accumulated Depreciation account had total credits of $20,000 during the year. Hanna Company did not record any gains or losses during the year. Required: Using the Indirect method, determine the net cash provided by operating activities for the year. (List any deduction In cash outflows as negative amounts.) Answer is not complete. $ 35.000 Hanna Company Statement of Cash Flows-Indirect Method (partial) Net income Adjustments to convert net income to a cash basis: Depreciation 20,000 Increase in accounts receivable (19,000) Increase in inventory (33,000) Increase in accounts payable 15,000 Decrease in accrued liabilities (2.000) Increase in income taxes payable 4.000 Decrease in prepaid expenses 1.000 OOOOOOOOO OOOoooo (14,000) 21,000 $

Answer 1

$35,000 Hanna Company Statement of Cash Flows Indirect Method (Partial) Cash flows from operating activities Net Income Adjust to reconcile net income to cash basis: Depreciation Expenses Increase in Accounts receivable Increase in Inventory Decrease in Prepaid expenses Increase in Accounts payable Decrease in Accrued liabilities Increase in Income taxes payable $20.000 -$19.000 -$33.000 $1,000 $15.000 -$2.000 $4,000 -$14.000 $21.000 Net cash Provided by operating activities