Question

E17-4 Gutierrez Company reported net income of $225,000 for 2017, Gutierrez also Prepare the ope reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equip- activities sectio ment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 method. for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid (LO 2) expenses. Instructions Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 3 Statement of cashflow from operating activities (Indirect Method) 4 Particular Amount 5 Net Income 225,000 6 Adjustments to reconcile net income to net cash income 7 Depreciation Expense 45,000 8 Loss on Disposal of Equipment 5,000 9 Decrease in account receivable 15,000 10 Increase in account Payable 17,000 11 Decrease in Prepaid expenses 4,000 12 Net cash inflow from operating activities 311,000 13 14