For the just completed year, Hanna Company had net income of $50,500. Balances i
ID: 2476023 • Letter: F
Question
For the just completed year, Hanna Company had net income of $50,500. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were as follows:
December 31
The Accumulated Depreciation account had total credits of $50,000 during the year. Hanna Company did not record any gains or losses during the year.
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.)
Hanna Company
Statement of Cash Flows Indirect Method ( partial )
1. Net Income
2. Adjustments to convert
3.
4.
5
6.
7.
8.
9. Net cash provided by operating activities
December 31
End of Year Beginning of Year Current assets: Cash $ 64,000 $ 77,000 Accounts receivable $ 150,000 $ 196,000 Inventory $ 451,000 $ 364,000 Prepaid expenses $ 12,000 $ 14,500 Current liabilities: Accounts payable $ 352,000 $ 380,000 Accrued liabilities $ 9,000 $ 12,000 Income taxes payable $ 36,000 $ 29,000Explanation / Answer
Statement of Cash Flows (Indirect Method) For the Year Ended Cash flows from operating activities Net income 50500 Adjustments to net income uncollectible expense Depreciation expense 50,000 working capital adjustments decrease in accounts receivable 46000 increase in inventory -87000 decrease in prepaid expenses 2500 decraese in accounts payable -28000 decrease in accrued liabilities -3000 increase in income tax payable 7000 -12,500 Net cash provided by operating activities 38,000