Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $145,100. Depreciation recorded on store equipment for the year amounted to $23,900. Balances of the current asset and current liability accounts at the beginning and of the year are as follows: Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable Cash flows from operating activities: End of Year a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Changes in current operating assets and liabilities: $56,730 40,680 55,540 6,240 53,160 29,050 Net cash flow from operating activities Beginning of Year $51,620 38,150 58,070 4,900 48,830 31,900 Adjustments to reconcile net income to net cash flows from (used for) operating activities: b. Cash flows from operating activities differ from net income because it does not use the 100000 0 0 of accounting. For example revenues are recorded on the income statement when

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Cash Flows from (Used for) Operating Activities
The net income reported on the income statement for the current year was $145,100. Depreciation recorded on store equipment for the year amounted to $23,900. Balances of the current asset and current liability accounts at the beginning and end
of the year are as follows:
Cash
Accounts receivable (net)
Merchandise inventory
Prepaid expenses
Accounts payable (merchandise creditors)
Wages payable
Cash flows from operating activities:
End
of Year
a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
$56,730
40,680
55,540
6,240
53,160
29,050
Changes in current operating assets and liabilities:
Beginning
of Year
$51,620
38,150
58,070
4,900
48,830
31,900
Statement of Cash Flows (partial)
Net cash flow from operating activities
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
b. Cash flows from operating activities differ from net income because it does not use the
0 000
of accounting. For example revenues are recorded on the income statement when
Transcribed Image Text:Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $145,100. Depreciation recorded on store equipment for the year amounted to $23,900. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable Cash flows from operating activities: End of Year a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. $56,730 40,680 55,540 6,240 53,160 29,050 Changes in current operating assets and liabilities: Beginning of Year $51,620 38,150 58,070 4,900 48,830 31,900 Statement of Cash Flows (partial) Net cash flow from operating activities Adjustments to reconcile net income to net cash flows from (used for) operating activities: b. Cash flows from operating activities differ from net income because it does not use the 0 000 of accounting. For example revenues are recorded on the income statement when
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