Question

Line torowing intormabon apones to the questions displayed below Lansing Company's current year income statement and selected balance sheet data at December 31 of the current and prior years follow. LANSING COMPANY Income Statement For Current Year Ended December 31 Sales revenue $112,200 Expenses Cost of goods sold 47. Depreciation expense 14.See Salaries expense 23. Rent expense 9. See Insurance expense Interest expense 4,20 utilities expense Net income $ 6, See LANSING COMPANY Selected Balance Sheet Accounts At December 31 Current Year Accounts receivable $6.1 Inventory Accounts payable 4. Salaries payable Utilities payable Prepaid insurance Prepaid rent Prior Year $5. 2.4 1,2 5. Required: Prepare the operating activities section of the statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) LANSING COMPANY Cash Flows from Operating Activities-indirect Method For Current Year Ended December 31 Cash flows from operating activities A n ts to reconcile net income to cash provided by operations
1

2

2

3

3

4

4

5

5

Answer 1

Answer to first question in the list (Lansing Company): $6,500 LANSING COMPANY Cash Flows from Operating Activities - Indirect Method For Current Year Ended December 31 Cash Flow from Operating Activities: Net Income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expense $14,500 Decrease in Accounts Receivables $700 Increase in Inventory -$690 Decrease in Prepaid Insurance Increase in Prepaid Rent -$90 Decrease in Accounts Payable -$700 Increase in Salaries Payable $230 Increase in Utilities Payable $110 Net Cash provided by operating activities $70 [Non-cash expense and so added back] [$6,800 - $6,100; Working capital decreases and so added] [$1,790 - $2,480; Working capital increases and so deducted] [$380 - $310; Working capital decreases and so added] [$230 - $320; Working capital increases and so deducted] [$4,900 - $5,600; Working capital increases and so deducted] ($980 - $750; Working capital decreases and so added] $14,130 ($320 - $210; Working capital decreases and so added] $20,630 NOTE: As the answer is positive, it is considered as net cash provided by the opearating activities.