For the just completed year, Hanna Company had net income of $85,000. Balances i
ID: 2488232 • Letter: F
Question
For the just completed year, Hanna Company had net income of $85,000. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were as follows: December 31 End of Year Beginning of Year Current assets: Cash $ 61,000 $ 81,000 Accounts receivable $ 166,000 $ 184,000 Inventory $ 442,000 $ 346,000 Prepaid expenses $ 11,500 $ 13,000 Current liabilities: Accounts payable $ 358,000 $ 394,000 Accrued liabilities $ 8,500 $ 12,000 Income taxes payable $ 34,000 $ 25,000 The Accumulated Depreciation account had total credits of $56,000 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.)
Required:Explanation / Answer
net income 85000
depreciation 56000
decrease in account receivable 18000
increase inventory (96000)
decrease in Prepaid expenses 1500
decrease Accounts payable (36000)
decrease Accrued liabilities (3500)
increase Income taxes payable 9000
(51000)
operating activities for the year 34000