Prepare the operating activities section of the statement of cash flows for 2014
ID: 2376782 • Letter: P
Question
Prepare the operating activities section of the statement of cash flows for 2014. Use the indirect method.
The current sections of Sanford Inc.%u2019s balance sheets at December 31, 2013 and 2014, are presented here. Sanford%u2019s net income for 2014 was $153,000. Depreciation expense was $27,000.
Prepare the operating activities section%u2014indirect method.
2014
2013
Current assets
Cash
$105,000
$ 99,000
Accounts receivable
80,000
89,000
Inventory
168,000
172,000
Prepaid expenses
27,000
22,000
Total current assets
$380,000
$382,000
Current liabilities
Accrued expenses payable
$ 15,000
$%u2002%u20025,000
Accounts payable
85,000
92,000
Total current liabilities
$100,000
$ 97,000
2014
2013
Current assets
Cash
$105,000
$ 99,000
Accounts receivable
80,000
89,000
Inventory
168,000
172,000
Prepaid expenses
27,000
22,000
Total current assets
$380,000
$382,000
Current liabilities
Accrued expenses payable
$ 15,000
$%u2002%u20025,000
Accounts payable
85,000
92,000
Total current liabilities
$100,000
$ 97,000
Explanation / Answer
Hi,
Please find the answer as follows:
Thanks.
Net Income 153000 Add Depreciation 27000 Decrease in Accounts Receivable 9000 Decrease in Inventory 4000 Less Increase in Prepaid Expenses -5000 Decrease in Accounts Payable -7000 Decrease in Accrued expenses payable -10000 Cash Flow Provided by Operating Activities 171000