Problem 12-1A indirect: Computing cash flows from operations LO P2 Lansing Compa
ID: 2489547 • Letter: P
Question
Problem 12-1A indirect: Computing cash flows from operations LO P2 Lansing Company's 2015 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2014 and 2015, follow. LANSING COMPANY Income Statement For Year Ended December 31, 2015 $97,200 Sales revenue Expenses Cost of goods sold 42,000 Depreciation expense 12,000 Salaries expense 18,000 9,000 Rent expense Insurance expense 3,800 3.600 Interest expense 2,800 Utilities expense 6,000 Net income LANSING COMPANY Selected Balance Sheet Accounts At December 31 2015 2014 $5,600 $5,800 Accounts receivable Inventory 1.980 1.540 Accounts payable 4.400 4.600 880 700 Salaries payable Utilities payable 220 160 260 280 Prepaid insurance Prepaid rent 220 180Explanation / Answer
LANSING COMPANY
CASH FLOW FROM OPERATING ACTIVITIES - INDIRECT METHOD
FOR THE YEAR ENDED DECEMBER 31, 2015
Cash Flow from Operating Activities Amount Amount Net Income $6000 Adjustments to reconcile net income to net cash provided by operations: Depreciation $12000 Decrease in Accounts Receivable $200 Increase in Inventory ($440) Decrease in Accounts Payable ($200) Increase in Salaries Payable $180 Increase in Utilities Payable $60 Decrease in Prepaid Insurance $20 Increase in Prepaid Rent ($40) Net Cash Flow Operating Activities $17780