The current sections of Scoggin Inc.’s balance sheets at December 31, 2014 and 2
ID: 2463017 • Letter: T
Question
The current sections of Scoggin Inc.’s balance sheets at December 31, 2014 and 2015, are presented here.
Scoggin’s net income for 2015 was $153,000. Depreciation expense was $24,000.
2015
2014
$105,000
$99,000
110,000
89,000
158,000
172,000
27,000
22,000
$400,000
$382,000
$15,000
$5,000
85,000
92,000
$100,000
$97,000
Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2015, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
2015
2014
Current assets Cash$105,000
$99,000
Accounts receivable110,000
89,000
Inventory158,000
172,000
Prepaid expenses27,000
22,000
Total current assets$400,000
$382,000
Current liabilities Accrued expenses payable$15,000
$5,000
Accounts payable85,000
92,000
Total current liabilities$100,000
$97,000
Explanation / Answer
Net cash Provided by Operating Activities using the Indirect method S No Particulars Amount(in $) A Net Income for 2015 153,000 B Add:Non cash Item Depreciation 24,000 C Adjustment for a)Increase in account receivables (21,000) b)Decrease in Inventory 14,000 c)Increase in prepaid expenses (5,000) d)Increase in accrued expenses payable 10,000 e)Decrease in accounts payable (7,000) Total(C) (9,000) Net cash Provided by Operating Activities(A+B+C) 168,000
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