Question

CALCULATOR PULLSCH Exercise 13-5 Mallory Michaels, senior accountant for Trendy Fashions, has gathered the following balances from the company's general ledger: December 31, 2016 December 31, 2015 Accounts Receivable $49,887 $63,831 Inventories 142,830 115,606 Prepaid Expenses 4,500 3,830 Accounts Payable 39,778 49,298 Accrued Liabilities 15.290 12,755 Income Taxes Payable 1,490 11,295 Net Income 654,721 Depreciation expense 82,598 Loss on the sale of land 15,600 Using the Indirect method, prepare the cash flows provided by operating activities section of the statement of cash flows for 2016. (Show amounts that decrew e.g. -15,000 or in parentheses, e.g. (15,000).) Cash flows from operating activities haco 2000-2020 Wiens. Reserved. An of Women 30 899 4 % A 2 $ 4 3 & 7 6 8 9 0 W E R T Y U Р S D F H J K L x С V B N > M

Answer 1

Cash flow from operating activities

Net income = 654,721

Adjustments

Depreciation expense = 82,598

Loss on sale of land = 15,600

Decrease in account receivable = 13,944

Increase in inventory = (27,224)

Increase in prepaid expense = (670)

Decrease in account payable = (9,520)

Increase in accrued liabilities = 2,535

Decrease in tax payable = (9,805)

Net cash flow from operating activities

= $722,179.

Please note that the decrease or increase in assets and liabilities is calculated the difference between both the years.