Cash Flows from Operating ActivitiesIndirect Method

The net income reported on the income statement for the current year was $245,400. Depreciation recorded on equipment and a building amounted to $73,400 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

	End of Year		Beginning of Year
Cash	$67,730		$71,790
Accounts receivable (net)	85,880		88,590
Inventories	169,330		152,630
Prepaid expenses	9,410		10,120
Accounts payable (merchandise creditors)	75,650		80,120
Salaries payable	10,900		9,980

Cash Flows from operating Activities-Indirect Method The net income reported on the income statement for the current year was $245,400. Depreciation recorded on equipment and a building amounted to $73,400 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year $67,730 Cash $71,790 Accounts receivable (net) 85,880 88,590 nventories 169,330 152,630 9,410 Prepaid expenses 10,120 Accounts payable (merchandise creditors) 75,650 80,120 Salaries payable 10,900 9,980 Hints Hide a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required. Statement of Cash Flows (partial) Cash flows from operating activities Net income Adjustments to reconcile net income to net cash flow from operating activities Depreciation Changes in current operating assets and liabilities Decrease in accounts reoeivable increase in inventories Decrease in prepaid expenses Decrease in accounts payable Unarease in salaries payable Net cash flow from operating activities Show All Feedback