The current assets and current liabilities of JAE Company on December 31, 2019 and 2018, are as follows. The corporation€™s net income for 2019 was $50,000. Included in its expenses was depreciation of $12,000. Prepare a schedule of the cash flows from operating activities for 2019. Use Figure 24.5 as a model for this schedule.

Figure 24.5

Transcribed Image Text:

Dec. 31, 2019 Dec. 31, 2018 Cash $ 83,500 100,000 $75,000 Accounts Receivable Prepaid Expenses Merchandise Inventory Accounts Payable Notes Payable (Borrowing) 95,000 16,100 14,000 75,000 90,000 60,400 45,000 51,000 53,000 Your Products, Inc. Statement of Cash Flows Year Ended December 31, 2019 Cash Flows from Operating Activities Net income after taxes (per income statement) Adjustments to reconcile net income to net cash provided by operating activities Depreciation Expense 5556 3 7680 500) 4000 Amortization of premium on bonds payable Gain on sale of equipment Changes in noncash current assets and current liabilities (28500 20000 Increase in Accounts Receivable Decrease in Merchandise Inventory Decrease in Prepaid Expenses Increase in Supplies Decrease in Accounts Payable Increase in Sales Tax Payable 300 250) (13500) 400 Increase in Payroll Taxes Payable Increase in Interest Payable Total Adjustments Net Cash Provided by Operating Activities 120 645 1760 5 37958 Cash Flows from Investing Activities Proceeds from sale of equipment Purchase of Office Equipment Net Cash Provided by Investing Activities 8000 4500 3500 Cash Flows from Financing Activities Payment of Mortgage Payable principal Proceeds from issue of Common Stock Payment of dividends on Preferred Stock Net Cash used in Financing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, January 1, 2019 500 0 2000 4000 700 0) 34458 80773 115231 Cash and Cash Equivalents, December 31, 2019