The net income reported on the income statement for the current year was $122,000. Depreciation recorded on store equipment for the year amounted to $20,100. 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 $47,460 $43,660 Accounts receivable (net) 34,030 32,260 Merchandise inventory 46,460 49,120 Prepaid expenses 5,220 4,150 Accounts payable (merchandise creditors) 44,470 41,300 Wages payable 24,300 26,980 a. Prepare the Cash Flows from 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) Cash flows from operating activities: $fill in the blank 12e1f1fab05a039_2 Adjustments to reconcile net income to net cash flow from operating activities: fill in the blank 12e1f1fab05a039_4 Changes in current operating assets and liabilities: fill in the blank 12e1f1fab05a039_6 fill in the blank 12e1f1fab05a039_8 fill in the blank 12e1f1fab05a039_10 fill in the blank 12e1f1fab05a039_12 fill in the blank 12e1f1fab05a039_14 Net cash flow from operating activities $fill in the blank 12e1f1fab05a039_15 b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when .

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The net income reported on the income statement for the current year was $122,000. Depreciation recorded on store equipment for the year amounted to $20,100. 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	$47,460		$43,660
Accounts receivable (net)	34,030		32,260
Merchandise inventory	46,460		49,120
Prepaid expenses	5,220		4,150
Accounts payable (merchandise creditors)	44,470		41,300
Wages payable	24,300		26,980

a. Prepare the Cash Flows from 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)

Cash flows from operating activities:
	$fill in the blank 12e1f1fab05a039_2
Adjustments to reconcile net income to net cash flow from operating activities:
	fill in the blank 12e1f1fab05a039_4
Changes in current operating assets and liabilities:
	fill in the blank 12e1f1fab05a039_6
	fill in the blank 12e1f1fab05a039_8
	fill in the blank 12e1f1fab05a039_10
	fill in the blank 12e1f1fab05a039_12
	fill in the blank 12e1f1fab05a039_14
Net cash flow from operating activities		$fill in the blank 12e1f1fab05a039_15

b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when .

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