Exercise 12-2 Net Cash Provided by Operating Activities Lo12-2 For the just completed year, Hanna Company had net income of $35,000. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows December 31 Beginning of Year End of Year Current assets: Cash Accounts receivable Inventory Prepaid expenses s30,000 40,000 125,000 106,000 213,000 180,000 6,000 S 7,000 Current liabilities: Accounts payable Accrued liabilities 210,000 $ 195,000 $ 4,000 6,000 S 34,000 30,000 Income taxes payable The Accumulated Depreciation account had total credits of $20,000 during the year. Hanna Company did not record any gains or losses during the year. Required: Use the indirect method to determine the net cash provided by (or used in) operating activities for the year (List any deduction in cash and cash outflows as negative amounts.) Hanna Company Statement of Cash Flows-Indirect Method (partial) Net income Adjustments to convert net income to a cash basis: Net cash provided by (used in) operating activities ows ds hegative amounts.) Hanna Company Statement of Cash Flows -Indirect Method (partial) Net income Adjustments to convert net income to a cash basis: O944EP Decrease in accounts payable Decrease in accounts receivable Decrease in accrued liabilities Decrease in income taxes payable T Net cash provided by (used in) operating activities Hanna Company Statement of Cash Flows Indirect Method (parti Net income Adjustments to convert net income to a cash basis: Decrease in inventory Decrease in prepaid expenses Depreciation Increase in accounts payable Increase in accounts receivable Incroaco in accrort liahilities Net casih provided by (used in) operating activities provided by (used in) operating actvities Required: Use the indirect method to determine the net cash provided by ( (List any deduction in cash and cash outflows as negative a Hanna Company Statement of Cash Flows-Indirect Method ( Net income Adjustments to convert net income to a cash basis: Increase in accounts receivable Increase in accrued liabilities Increase in income taxes payable Increase in inventory Increase in prepaid expenses Net cash provided by (used in) operating activities