Question

The current sections of Scoggin Inc.’s balance sheets at December 31, 2016 and 2017, are presented here.

Scoggin’s net income for 2017 was $154,700. Depreciation expense was $23,300.

		2017		2016
Current assets
Cash		$102,700		$97,700
Accounts receivable		109,400		80,000
Inventory		158,200		173,000
Prepaid expenses		26,900		25,900
Total current assets		$397,200		$376,600
Current liabilities
Accrued expenses payable		$15,000		$9,300
Accounts payable		84,000		95,600
Total current liabilities		$99,000		$104,900

Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2017, using the indirect method

Answer 1

Statement of cash flows (indirect)
For the year ended December 31,2017
Cash flows from operating activities:
Net income		$154,700
Adjustments:
Depreciation expense	$23,300
Increase in accounts receivable	($29,400)
Decrease in inventory	$14,800
Increase in prepaid expenses	($1,000)
Increase in accrued expenses payable	$5,700
Decrease in accounts payable	($11,600)	$1,800
Net cash flows from operating activities		$156,500