For the just completed year, Hanna Company had net income of $69,500. Balances i
ID: 2564202 • Letter: F
Question
For the just completed year, Hanna Company had net income of $69,500. 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 $54,000 during the year. Hanna Company did not record any gains or losses during the year.
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.)
For the just completed year, Hanna Company had net income of $69,500. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were as follows:
Explanation / Answer
Statement of Cash Flows—Indirect Method (partial) Net income 69500 Adjustments to convert net income to a cash basis: Depreciation 54000 Decrease in accounts receivable 18000 Increase in inventory -75000 Decrease in prepaid expenses 3500 Decrease in accounts payable -32000 Decrease in accrued liabilities -5000 Increase in income taxes payable 3000 -33500 Net cash provided by operating activities 36000