For the just completed year, Strident Company had net income of $71,000. Balance

ID: 2531168 • Letter: F

Question

For the just completed year, Strident Company had net income of $71,000. 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 $ 63,000 $ 80,000 Accounts receivable $ 158,000 $ 182,000 Inventory $ 430,000 $ 355,000 Prepaid expenses $ 12,000 $ 13,000 Current liabilities: Accounts payable $ 358,000 $ 390,000 Accrued liabilities $ 8,000 $ 12,500 Income taxes payable $ 33,000 $ 29,000 The Accumulated Depreciation account had total credits of $44,000 during the year. Required: Using the indirect method, determine the net cash provided by (used in) operating activities for the year. (Amounts to be deducted and negative amounts should be indicated with a minus sign.)

Explanation / Answer

Answers

Cash Flows from Operating Activities:

Net Income

$ 71,000.00

Adjustments:

Depreciation expense [total credits in Accumulated depreciation]

$ 44,000.00

Decrease in Accounts receivables [182000 to 158000]

$ 24,000.00

Increase in Inventory [355000 to 430000]

$ (75,000.00)

Decrease in Prepaid Expenses [13000 to 12000]

$ 1,000.00

Decrease in Accounts payable [358000 to 390000]

$ (32,000.00)

Decrease in Accrued liability [12500 to 8000]

$ (4,500.00)

Increase in income tax payable [29000 to 33000]

$ 4,000.00

$ (38,500.00)

Net Cash flows from Operating Activities

$ 32,500.00