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Chapter 16 Homework

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Item 5

The account balances for the non-cash current assets and current liabilities of Kid-game Software Inc. are as follows:

	December 31
	2020			2019
Accounts receivable	$	122,000		$	99,000
Inventory		86,700			112,500
Prepaid expenses		51,400			45,500
Totals	$	260,100		$	257,000
Accounts payable	$	80,000		$	61,500
Salaries payable		24,000			35,000
Interest payable		45,500			37,500
Totals	$	149,500		$	134,000

During 2020, Kid-game Software Inc. reported depreciation expense of $52,000. All purchases and sales are on account. Profit for 2020 was $248,000. Required: 1. Prepare the operating activities section of the statement of cash flows using the indirect method. (List any deduction in cash and cash outflows as negative amounts.)

2. Not available in Connect.

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