For the just completed year, Hanna Company had net income of $44,500. Balances i
ID: 2478041 • Letter: F
Question
For the just completed year, Hanna Company had net income of $44,500. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows: December 31 Beginning of Year End of Year Current assets: Cash Accounts receivable Inventory Prepaid expenses $ 62,000 $ 85,000 $152,000 196,000 $ 436,000 $ 358,000 $ 11,000 13,000 Current liabilities: Accounts payable Accrued liabilities $ 354,000 $ 390,000 $ 9,000 12,000 $ 35,000 29,000 Income taxes payable The Accumulated Depreciation account had total credits of $60,000 during the year. Hanna Company did not record any gains or losses during the year. Required Use the indirect method to determine the net cash provided by (or used in) operating activities for the year. (List any deduction in cash and cash outflows as negative amounts.)Explanation / Answer
Hanna Company Statement of Cash Flows (Indirect Method) Particulars Amount $ Operating Activities Net Income 44,500 Adjustments: Non-Cash adjustment: Depreciation 60,000 Due to changes in Working capital Due to changes in accounts receivable 40,000 Due to changes in Inventories -78,000 Due to changes in Prepaid expenses 2,000 Due to changes in accounts payable -36,000 Due to changes in accruals -3,000 Due to changes in Income tax payable 6,000 Due to changes in Current portion of long-term debt Due to changes in Other current liabilities Net Cash provided (used) by operating activities 35,500