Question

Current Attempt in Progress The current sections of Scoggin Inc.'s balance sheets at December 31, 2019 and 2020, are presented here. Scoggin's net income for 2020 was $153,000. Depreciation expense was $24,000. 2019 2018 Current assets Cash Accounts receivable $105,000 110,000 158,000 27,000 $99,000 89,000 172,000 22.000 Inventory Prepaid expenses Total current assets $400,000 $382.000 Current liabilities Accrued expenses payable $15,000 $5,000 Accounts payable 85,000 92.000 Total current liabilities $100,000 $97,000

Answer 1

Solution

Scoggon Inc.
Statement of Cash Flows
For the Year Ended December 31, 2019
Cash flows from operating activities:
Net income		$ 153,000.00
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation expense	$   24,000.00
Increase in accounts receivables	$ (21,000.00)
Decrease in inventory	$   14,000.00
Increase in prepaid expense	$    (5,000.00)
Increase in accrued expense	$   10,000.00
Decrease in accounts payable	$    (7,000.00)
		$   15,000.00
Net cash from Operating Activities		$ 168,000.00

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General notes for cash flow
Cash is increased when Current liability increase or Current asset Decrease.
Cash is Decreased when Current liability Decrease or Current asset Increase.
Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash
Profit on sale of asset or investment is a non cash profit and hence will be deducted from operating income.