For the just completed year, Hanna Company had net income of $73,500. Balances i
ID: 2390937 • Letter: F
Question
For the just completed year, Hanna Company had net income of $73,500. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows: December 31 End of Beginning Year of Year Current assets: Cash and cash equivalents Accounts receivable Inventory Prepaid expenses $ 59,000 81,000 5 152,000 190,000 $ 436,000 $358,000 $ 12,000 $ 13,500 Current liabilities: Accounts payable Accrued liabilities Income taxes payable S 356,000 396,000 $ 8,000 12,000 $ 34,000 28,00 The Accumulated Depreciation account had total credits of $42,000 during the year. Hanna Company did not record any gains or losses during the year Required Using the indirect method, determine the net cash provided by operating activities for the year. (List any deduction in cash and cash outflows as negative amounts.)Explanation / Answer
Calculate cash flow from operating activities :
Net income 73500 Adjustment to reconcile net income Depreciation expense 42000 Increase account receivable 38000 Decrease inventory -78000 Decrease prepaid expense 1500 Decrease account payable -40000 Decrease accured liabilities -4000 Increase income tax payable 6000 -34500 Net cash flow from operating activities 39000