Use the following selected date and additional information from the records of H
ID: 2389439 • Letter: U
Question
Use the following selected date and additional information from the records of Hitchcock Corporation to answer the question that follows.Balance Sheet Data 2004 2003
Accounts Receivable $50,000 $40,000
Inventories 32,000 25,000
Prepaid Rent 11,000 5,000
Accounts payable 23,000 20,000
Salaries payable 19,000 15,000
Taxes payable 8,000 11,000
Income Statement Data 2004
Depreciation Expense 6,000
Net Income 50,000
Required: Prepare the Operating Activities section of the Statement of Cash Flows for the year ended 2004. Use the INDIRECT Method.
Explanation / Answer
CASH FLOW STATEMENT
CASH FLOW STATEMENT
Cash Flow from Operating Activities: Net Income 50000 Add: Depreciation 6000 Increase in Accounts payble 3000 Increase in Salaries Payble 4000 Total Increse in Operating Activities: 13000 63000 Less: Increase in Accounts receivable 10000 Increase in Inventories 7000 Increase in Prepaid Rent 6000 Derease in Taxpayble 3000 Total Decrease in Operating Activities: 26000 Net Cash Flow From Operating Activities: 37000