Question

The current sections of Bridgeport Corp.'s balance sheets at December 31, 2021 and 2022, are presented here. Bridgeport Corp.'s net income for 2022 was $76,500. Depreciation expense was $13,500. 2022 2021 Current assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Current liabilities Accrued expenses payable Accounts payable Total current liabilities $52,500 40,000 84,000 13,500 $190,000 $ 49,500 44,500 86,000 11,000 $191,000 $ 7,500 42,500 $50,000 $ 2,500 46,000 $ 48,500 Prepare the net cash provided (used) by operating activities section of the company's statement of cash flows for the year ended December 31, 2022, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

I have highlighted the incorrect portion.

Solution

Bridgeport Corp.
Statement of Cash Flows (Partial)
For the year ended December 31 2022
Net income		$     76,500.00
Adjustments to reconcile net income to
net cash from operating activities
Depreciation expense	$ 13,500.00
Decrease in Inventory	$      2,000.00
Decrease in acounts receivable	$    4,500.00
Decrease in accounts payable	$   (3,500.00)
Increase in accrued expense payable	$    5,000.00
Increase in prepaid expense	$   (2,500.00)
		$     19,000.00
Net cash from operating activities		$     95,500.00