For the Just completed year, Hanna Company had net Income of $73,000. Balances I

Question

For the Just completed year, Hanna Company had net Income of $73,000. Balances In the company's current asset and current llablity accounts at the beginning and end of the year were as follows: December 31 End of Beginning points of Year Cash and cash equivalents Accounts receivable s 166,eee 18e,eee S442,eee 352,eee 12, 500 14, 5 Prepaid expenses Current liabilities: Accounts payable Accrued 1iabilities Income taxes payable The Accumulated Depreclation account had total credits of $54,000 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 th year (List any deduction In cash and cash outflows as negative amounts.) Answer is complete but not entirely correct. Statement of Cash Flows-Indirect Method Net income 73,000 Adjustments to convert net income to a cash basis: Depreciation Decrease in aocounts receivable Decrea e in prepaid expenses Increase in income taxes payable Increase in inventory Decrease in aocounts payable Decrease in aocrued liabilities Decrease in accrued liabilities 54.000 14.000 2,000 9.000 24,000 24,000 24 ,000 X 3 o151000 3 224.000

Explanation / Answer

part 2

free cash flow = net cash provided by operating activities - capital expenditures - dividends = 31500-120000-29100 = -117600

part 1 net income 73000 adjustments depreciaiton 54000 decrease in accounts receivable 14000 decrease in prepaid expenses 2000 increase in income taxes payable 9000 increase in inventory (90000) decrease in accounts payable (24000) decrease in accured liabilites (4500) (39500) net cash provided by operating activities 33500

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