Prepare the operating activities section of the statement of cash flows for Hori
ID: 2587514 • Letter: P
Question
Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method.
Portions of the financial statements for Horizon Telecom are provided below. HORIZON TELECOM Income Statement For the Year Ended December 31, 2018 $618,000 Revenues Expenses Cost of goods sold Operating expenses 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 21,600Explanation / Answer
Cash flows from operating activities Net income 53000 Adjustments for non-cash effects: Depreciation 32000 Changes in current assets and current liabilities: Increase in Accounts receivable -4300 Increase in inventory -11600 Decrease in prepaid rent 9800 Increase in operating expenses payable 5600 Decrease in Accounts payable -7000 Increase in income taxes payable 21600 Net Cash flows from operating activities 99100