Question

The net income reported on the income statement for the current year was $73,600. Depreciation recorded...

The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

End of Year

Beginning of Year

Cash $23,500 $18,700
Accounts receivable (net) 56,000 48,000
Merchandise inventory 35,500 40,000
Prepaid expenses 4,750 7,000
Accounts payable (merchandise creditors) 21,800 16,800
Wages payable 4,900 5,800

Required:

A. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required.
B.

Briefly explain why net cash flow from operating activities is different than net income.



Amount Descriptions

Amortization of intangible assets
Decrease in accounts payable
Decrease in accounts receivable
Decrease in merchandise inventory
Decrease in prepaid expenses
Decrease in wages payable
Depreciation
Increase in accounts payable
Increase in accounts receivable
Increase in merchandise inventory
Increase in prepaid expenses
Increase in wages payable
Net cash flow from operating activities
Net cash flow used for operating activities
Net income
Net loss

A. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required.

Statement of Cash Flows (partial)

1

Cash flows from operating activities:

2

3

Adjustments to reconcile net income to net cash flow from operating activities:

4

5

Changes in current operating assets and liabilities:

6

7

8

9

10

11

Homework Answers

Answer #1

1)

cash flow from operating activities
Net income 73600

Adjustments to reconcile net income to net cash flow from operating activities:

Depreciation expense 27400
Changes in current operating assets and liabilities:
Increase account receivable -8000
Decrease inventory 4500
Decrease prepaid expense 2250
Increase account payable 5000
Decrease wages payable -900
30250
Net cash flow from operating activities 103850

2) Net income includes accured basis revenue and expense and non cash expense but net cash flow from operating activities includes only cash activities (revenue and expense) so net income is differ from net cash flow from operating activities

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The net income reported on the income statement for the current year was $139,400. Depreciation recorded...
The net income reported on the income statement for the current year was $139,400. Depreciation recorded on store equipment for the year amounted to $23,000. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of year Beginning of Year Cash $56,740 $51,630 Accounts Recievable (net) 40,680 38,150 Merchandise inventory 55,550 58,080 Prepaid expenses 6,240 4,900 Accounts Payable (merchandise creditors) 53,170 48,840 Wages payable 29,050 31,910 Prepare the Cash...
The net income reported on the income statement for the current year was $423,900. Depreciation recorded...
The net income reported on the income statement for the current year was $423,900. Depreciation recorded on store equipment for the year amounted to $17,560. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $42,670 $40,170 Accounts receivable (net) 30,670 27,430 Inventories 38,830 45,750 Prepaid expenses 3,680 4,890 Accounts payable (merchandise creditors) 39,630 35,780 Wages payable 21,610 23,900 Required: a. Prepare the...
The net income reported on the income statement for the current year was $250,300. Depreciation recorded...
The net income reported on the income statement for the current year was $250,300. Depreciation recorded on equipment and a building amounted to $74,800 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $66,580 $69,240 Accounts receivable (net) 84,420 85,440 Inventories 166,450 147,200 Prepaid expenses 9,250 9,760 Accounts payable (merchandise creditors) 74,370 77,270 Salaries payable 10,720 9,620 a. Prepare...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $137,900. Depreciation recorded on store equipment for the year amounted to $22,800. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $53,640 $48,810 Accounts receivable (net) 38,460 36,070 Merchandise inventory 52,510 54,910 Prepaid expenses 5,900 4,640 Accounts payable (merchandise creditors) 50,260 46,170 Wages...
he net income reported on the income statement for the current year was $346,400. Depreciation recorded...
he net income reported on the income statement for the current year was $346,400. Depreciation recorded on equipment and a building amounted to $99,330 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $90,570 $96,530 Accounts receivable (net) 111,490 119,020 Inventories 222,910 208,840 Prepaid expenses 13,500 14,540 Accounts payable (merchandise creditors) 96,260 103,590 Salaries payable 15,150 12,980 Required: A....
The net income reported on the income statement for the current year was $146,700. Depreciation recorded...
The net income reported on the income statement for the current year was $146,700. Depreciation recorded on store equipment for the year amounted to $24,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $58,390 $53,130 Accounts receivable (net) 41,870 39,260 Inventories 57,160 59,770 Prepaid expenses 6,420 5,050 Accounts payable (merchandise creditors) 54,710 50,260 Wages payable 29,900 32,830 a. Prepare the Cash...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $116,500. Depreciation recorded on store equipment for the year amounted to $19,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $47,530 $43,730 Accounts receivable (net) 34,080 32,320 Merchandise inventory 46,530 49,200 Prepaid expenses 5,230 4,150 Accounts payable (merchandise creditors) 44,540 41,370 Wages...
The income statement disclosed the following items for the year: Depreciation expense $ 65,000 Gain on...
The income statement disclosed the following items for the year: Depreciation expense $ 65,000 Gain on disposal of equipment 27,500 Net income 620,000 The changes in the current assets and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $11,200 Inventory (6,350) Prepaid insurance (1,200) Accounts payable (4,200) Income taxes payable 1,650 Dividends payable 2,500 Required: A. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to...
The net income reported on the income statement for the current year was $151,100. Depreciation recorded...
The net income reported on the income statement for the current year was $151,100. Depreciation recorded on store equipment for the year amounted to $24,900. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $57,870 $52,660 Accounts receivable (net) 41,490 38,920 Inventories 56,650 59,240 Prepaid expenses 6,370 5,000 Accounts payable (merchandise creditors) 54,220 49,820 Wages payable 29,630 32,540 a. Prepare the “Cash...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $135,500. Depreciation recorded on store equipment for the year amounted to $22,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $54,060 $49,190 Accounts receivable (net) 38,760 36,350 Merchandise inventory 52,920 55,340 Prepaid expenses 5,950 4,670 Accounts payable (merchandise creditors) 50,650 46,530 Wages...