For the just completed year, Hanna Company had net income of $61,000. Balances i
ID: 2479691 • Letter: F
Question
For the just completed year, Hanna Company had net income of $61,000. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows: 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. 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
For the Year Ending December 31
Cash Flows from Operating Activities
Net Income
$ 61,000
Add Expenses Not Requiring Cash:
Depreciation
$ 42,000
Other Adjustments:
Add Reduction in Accounts Receivable
$ 28,000
Add Increase in Income Tax Payable
$ 6,000
Add decrease in Prepaid Expenses
$ 2,000
Subtract Decrease in Accounts Payable
$ (32,000)
Subtract Increase in Inventory
$ (69,000)
Subtract Decrease in Accured liabilities
$ (4,500)
Net Cash from Operating Activities
$ 33,500
Hanna Company
Statement of Cash Flows
For the Year Ending December 31
Cash Flows from Operating Activities
Net Income
$ 61,000
Add Expenses Not Requiring Cash:
Depreciation
$ 42,000
Other Adjustments:
Add Reduction in Accounts Receivable
$ 28,000
Add Increase in Income Tax Payable
$ 6,000
Add decrease in Prepaid Expenses
$ 2,000
Subtract Decrease in Accounts Payable
$ (32,000)
Subtract Increase in Inventory
$ (69,000)
Subtract Decrease in Accured liabilities
$ (4,500)
Net Cash from Operating Activities
$ 33,500