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Required information Use the following information for the Problems below. [The following information applies to the...

Required information

Use the following information for the Problems below.

[The following information applies to the questions displayed below.]

Lansing Company’s current-year income statement and selected balance sheet data at December 31 of the current and prior years follow.

LANSING COMPANY
Income Statement
For Current Year Ended December 31
Sales revenue $ 97,200
Expenses
Cost of goods sold 42,000
Depreciation expense 12,000
Salaries expense 18,000
Rent expense 9,000
Insurance expense 3,800
Interest expense 3,600
Utilities expense 2,800
Net income $ 6,000

  

LANSING COMPANY
Selected Balance Sheet Accounts
At December 31 Current Year Prior Year
Accounts receivable $ 5,600 $ 5,800
Inventory 1,980 1,540
Accounts payable 4,400 4,600
Salaries payable 880 700
Utilities payable 220 160
Prepaid insurance 260 280
Prepaid rent 220 180

Problem 12-1A Indirect: Computing cash flows from operations LO P2

Required:
Prepare the operating activities section of the statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)

Business   Accounting   
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Answer #1
Cash Flows from Operating Activities—Indirect Method
For Current Year Ended December 31
Cash flows from operating activities:
Net income 6000
Adjustments to reconcile net income to net cash provided by operations:
Depreciation expense 12000
Accounts receivable decrease 200
Inventory increase -440
Accounts payable decrease -200
Salaries payable increase 180
Utilities payable increase 60
Prepaid insurance decrease 20
Prepaid rent increase -40
11780
Net cash provided by operating activities 17780
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