Question

Lansing Company’s 2015 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2014 and 2015, follow. LANSING COMPANY Income Statement For Year Ended December 31, 2015 Sales revenue $ 64,000 Expenses Cost of goods sold 19,000 Depreciation expense 4,500 Salaries expense 8,000 Rent expense 2,500 Insurance expense 1,900 Interest expense 1,800 Utilities expense 1,100 Net income $ 25,200 LANSING COMPANY Selected Balance Sheet Accounts At December 31 2015 2014 Accounts receivable $ 3,700 $ 3,800 Inventory 950 917 Accounts payable 1,300 1,380 Salaries payable 440 340 Utilities payable 90 50 Prepaid insurance 110 130 Prepaid rent 160 140 Required: Prepare the cash flows from operating activities section only of the company’s 2015 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Lansing Company’s 2015 statement of cash flows using the indirect method

LANSING COMPANY
Statement of Cash Flows
For Year Ended December 31, 2015
Cash flows from operating activities;
Net Income		$25,200
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation Expenses	$4,500
Changes in Current Assets and Current Liabilities
Add : Decrease in Accounts Receivables	$100
Less : Increase in Inventory	($33)
Less : Decrease in Accounts Payables	($80)
Add : Increase in Salaries Payable	$100
Add : Increase in Utilities Payable	$40
Add : Decrease in Prepaid Insurance	$20
Less : Increase in Prepaid Rent	($20)	$4,627
Net cash provided by operating activities		$29,827