Portions of the financial statements for Horizon Telecom are provided below. HOR
ID: 2587506 • Letter: P
Question
Portions of the financial statements for Horizon Telecom are provided below. HORIZON TELECOM Income Statement For the Year Ended December 31, 2018 $618,000 Expenses: Cost of goods sold Operating expensos Depreciation expense Income tax expense $367,000 113,000 32,000 53,000 Total expenses 565,000 Net Income 53,000 HORIZON TELECOM Selected Balance Sheet Data December 31, 2018 Increase in accounts receivable Increase in inventory Decrease in prepaid rent Increase in operating expenses payable Decrease in accounts payable Increase in income tax payable $ 4,300 11,600 9,800 5,600 7,000 21,600 Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method. (Amounts to be deducted and negative values should be indicated by minus sign.)Explanation / Answer
HORIZON TELECOM Cash Flow Statement For the year ended December 31, 2018 Cash flows from operating activities Net Income $ 53,000 Adjustment to reconcile net income to: Depreciation expense $ 32,000 Increase in accounts receivable $ (4,300) Increase in inventory $ (11,600) Decrease in prepaid rent $ 9,800 Increase in operating expenses payable $ 5,600 Decrease in accounts payable $ (7,000) Increase in income tax payable $ 21,600 $ 46,100 Net cash provided by operating activities $ 99,100