Sanhueza, Inc., reported a net cash flow from operating activities of $202,800 o

Question

Sanhueza, Inc., reported a net cash flow from operating activities of $202,800 on its statement of cash flows for the year ended December 31, 2012. The following information was reported in the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method: Decrease in income taxes payable $5,000 Decrease in inventories 12,400 Depreciation 19,100 Gain on sale of investments 8,600 Increase in accounts payable 3,400 Increase in prepaid expenses 2,100 Increase in accounts receivable 9,400 a. Determine the net income reported by Sanhueza, Inc., for the year ended December 31, 2012

Explanation / Answer

Decrease in income taxes payable                          (5000)

Decrease in inventories                                          12400

Depreciation                                                          19100

Gain on sale of investment                                     (8600)

Increase in Acc Payable                                           3400

Increase in prepaid expenses                                   (2100)

Increase in Acc Receivables                                     (9400)

                                                                               9800

Net income + 9800 = 202800

Net income = 202800 - 9800 = $193000

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