Question

LEARNING OUTCOME # 5 - Part B
Prepare the Operating Activities section of the Statement of Cash Flows for Acorn Technologies using the indirect method from the data below. All yellow cells require text or dollars for the solution to be complete.
	Acorn Technologies
	Comparative Balance Sheets
							December 31,
							2017	2016
	Current assets:
	Cash and cash equivalents						$                 67,200	$             12,800
	Accounts receivable						54,700	50,000
	Inventories						53,400	45,000
	Prepaid expenses						2,400	6,000
	Plant assets:
	Land						49,200	32,000
	Equipment, net						52,900	45,000
	Total assets						$              279,800	$          190,800
	Current liabilities:
	Accounts payable						$                 35,500	$             29,000
	Salaries payable						24,000	15,000
	Other accrued liabilities						22,100	25,000
	Long-term liabilities:
	Notes payable						49,000	35,000
	Stockholders’ equity:
	Common stock, no-par						89,000	60,000
	Retained earnings						60,200	26,800
	Total liabilities and stockholders’ equity						$              279,800	$          190,800
	Acorn Technologies
	Income Statement
	Year Ended December 31, 2017
	Revenues:
	Sales revenue								$            600,000
	Expenses:
	Cost of goods sold							$          350,000
	Salary expense							75,000
	Depreciation expense-equipment							12,000
	Other operating expense							50,000
	Interest expense							28,000
	Income tax expense							30,000
	Total expenses								545,000
	Net income								$               55,000
Acorn Technologies had no noncash investing and financing transactions during 2017. During the year, there were no sales of land or equipment, no payment of notes payable, no retirements of stock, and no treasury stock transactions.
Solution:
	Acorn Technologies
	Statement of Cash Flows
	Year Ended December 31, 2017
	Cash flows from operating activities:
	Net income
	Adjustments to reconcile net income to net cash provided by operating activities:
		Sub-total							-
	Net Cash flows from operating activities:								-

Answer 1

Acorn Technologies
Statement of Cash flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net Income		$ 55,000
Adjustments to reconcile net income to ;
Depreciation expense	$ 12,000
Increase in accounts receivable	$ (4,700)
Increase in inventories	$ (8,400)
Decrease in prepaid expenses	$    3,600
Increase in accounts payable	$    6,500
Increase in salaries payable	$    9,000
Decrease in accrued liabilities	$ (2,900)
		$ 15,100
Net cash provided by operating activities		$ 70,100

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