Please help with the starred financial accounting question at the bottom. The Ep
ID: 2470638 • Letter: P
Question
Please help with the starred financial accounting question at the bottom.
The Eppley Company reported a net income of $10,000 for the year just ended. Relevant data for the company follows:
Account
Beginning of year
End of year
Accounts receivable (net)
$80,000
$85,000
Inventory
123,000
133,000
Prepaid expense
7,000
8,000
Accounts payable
50,000
54,000
Accrued liabilities
10,000
14,000
Dividends payable
25,000
30,000
Long term debt payable 100,000 90,000
Other items:
Depreciation for the year $40,000
Gain on the sale of equipment $5,000
*Determine the net cash flows provided by (used in) operating activities for the Eppley Company.
Account
Beginning of year
End of year
Accounts receivable (net)
$80,000
$85,000
Inventory
123,000
133,000
Prepaid expense
7,000
8,000
Accounts payable
50,000
54,000
Accrued liabilities
10,000
14,000
Dividends payable
25,000
30,000
Explanation / Answer
Cash flow from operating activities
Net income
10,000
Add: Depreciation expense
$40,000
Decrease in account receivable
5,000
decrease in inventory
10,000
Decrease in prepaid expenses
1,000
Less : gain on sale of Equipment
-5,000
Decrease in accounts payable
-4,000
Decrease in accrued liabilities
-4,000
43,000
Net cash provided by operating activities
53,000
Net income
10,000
Add: Depreciation expense
$40,000
Decrease in account receivable
5,000
decrease in inventory
10,000
Decrease in prepaid expenses
1,000
Less : gain on sale of Equipment
-5,000
Decrease in accounts payable
-4,000
Decrease in accrued liabilities
-4,000
43,000
Net cash provided by operating activities
53,000