For the just completed year, Hanna Company had net income of $66,500. Balances i
ID: 2532164 • Letter: F
Question
For the just completed year, Hanna Company had net income of $66,500. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows December 31 End of Beginning Year of Year Current assets: Cash and cash equivalents Accounts receivable Inventory Prepaid expenses $60,000 81,000 $162,000 $200,000 $442,000 $346,000 12,500 14,000 Current liabilities: Accounts payable Accrued liabilities $360,000 $392,000 $ 9,000 13,000 35,000 29,000 Income taxes payable 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. Required Using the indirect method, determine the net cash provided by operating activities for the year. (List any deduction in cash and cash outflows as negative amounts.)Explanation / Answer
Cash flow from operating activities under indirect method :
Net income 66500 Adjustment to reconcile net income Depreciation 56000 Increase income tax payable 6000 Increase inventory -96000 Decrease prepaid expense 1500 Decrease in accured liabilities -4000 Decrease in account payable -32000 Decrease in account receivable 38000 -30500 Net cash flow from operating activities 36000