For the just completed year, Hanna Company had net income of $73,500. Balances i
ID: 2545151 • Letter: F
Question
For the just completed year, Hanna Company had net income of $73,500. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were as follows:
December 31
The Accumulated Depreciation account had total credits of $58,000 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.)
December 31
End of Year Beginning of Year Current assets: Cash and cash equivalents $ 55,000 $ 77,000 Accounts receivable $ 168,000 $ 180,000 Inventory $ 430,000 $ 358,000 Prepaid expenses $ 11,000 $ 14,500 Current liabilities: Accounts payable $ 354,000 $ 400,000 Accrued liabilities $ 8,000 $ 12,000 Income taxes payable $ 34,000 $ 26,000Explanation / Answer
Cashflows from Operating Activities: Net Income during the year 73500 Add: Depreciation 58000 Adjustment of changes in operating assets and liabilities: Decrease in Accounts receivable 12000 Increase in Inventorry -72000 Decrease in Prepaid expense 3500 Decrease in Accounts Payable -46000 Decrease in Accrued expense -4000 Increase in Income Tax payable 8000 Net cash provided from Operating Activities 33,000