Hardware Suppliers reports net income of $67,000. Included in that number are depreciation expense of $20,000 and a loss on the sale of land of $3,000. A comparison of this year’s and last year’s balance sheet reveals a decrease in accounts receivable of $18,000, a decrease in inventory of $20,000, and an increase in accounts payable of $35,000. Required:Prepare the

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Hardware Suppliers reports net income of $67,000. Included in that number are depreciation expense of $20,000 and a loss on the sale of land of $3,000. A comparison of this year’s and last year’s balance sheet reveals a decrease in accounts receivable of $18,000, a decrease in inventory of $20,000, and an increase in accounts payable of $35,000.

Required:
Prepare the operating activities section of the statement of cash flows using the indirect method. Do you see a pattern in Hardware Suppliers’ adjustments to net income to arrive at operating cash flows? What might this imply?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Related Book For answer-question

Financial Accounting

3rd edition

Authors: J. David Spiceland, Wayne Thomas, Don Herrmann

ISBN: 978-0078025549