For the just completed year, Hanna Company had net income of $71,000. Balances i
ID: 2457186 • Letter: F
Question
For the just completed year, Hanna Company had net income of $71,000. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were as follows:
December 31
The Accumulated Depreciation account had total credits of $48,000 during the year. Hanna Company did not record any gains or losses during the year.
Required: Create Statement of Cash flow - Indirect method
For the just completed year, Hanna Company had net income of $71,000. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were as follows:
Explanation / Answer
Hanna company
Statement of cash flows for the year ended
Particulars Amount($)
Net income 71000
Adjustments:
depreciation 48000
add: decrease in accounts receivable 30000
decrease in prepaid expense 2500
increase in income tax payable 6000
less: increase in inventory (90000)
decrease in accounts payable (30000)
decrease in accrued liabilities (4000)
Net cash flow from operating activities 33500.