Question

Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current year was $144,300. Depreciation recorded on store equipment for the year amounted to $23,800. 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
$57,140

$52,570

Accounts receivable (net)
40,970

38,850

Inventories
55,940

59,140

Prepaid expenses
6,290

4,990

Accounts payable (merchandise creditors)
53,540

49,730

Wages payable
29,260

32,490

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:

Net income

$

Adjustments to reconcile net income to net cash flow from operating activities:

Depreciation

Changes in current operating assets and liabilities:

Increase in accounts receivable

Decrease in inventories

Increase in prepaid expenses

Increase in accounts payable

Decrease in wages payable

Net cash flow from operating activities

$

Answer 1

Answer:- cash flow from Opercating Activities - $ 144,300 Net income Adjustment to reconcite net income: $23,800 depreciation $ 168600 changes in Current Operating ofsels and liabilities: increase in accounts receivables C40,970 - 3885D) - $2120 $3200 Decrease in mentories (59140- 55900) - $1300 Increcije in prepaid expenses (6290 - 4990) 3810 - Increase in accounts payable C53,540- 49739 Decrease in wages payable - 3230 (32490- 29260) Net cash flow from operating activities a $168, ubo