The current sections of Sanford Inc.\'s balance sheets at December 31, 2013 and
ID: 2482183 • Letter: T
Question
The current sections of Sanford Inc.'s balance sheets at December 31, 2013 and 2014, are presented here. Sanford's net income for 2014 was $153,000. Depreciation expense was $27,000.
2014
2013
Cash
Accounts receivable
Inventory
Prepaid expenses
27,000
22,000
$380,000
$382,000
Accrued expenses payable
Accounts payable
85,000
92,000
$100,000
$ 97,000
Instructions
Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2014, using the indirect method.
2014
2013
Current assetsCash
$105,000 $ 99,000Accounts receivable
80,000 89,000Inventory
168,000 172,000Prepaid expenses
27,000
22,000
Total current assets$380,000
$382,000
Current liabilitiesAccrued expenses payable
$ 15,000 $5,000Accounts payable
85,000
92,000
Total current liabilities$100,000
$ 97,000
Explanation / Answer
The cash flows from operating activities is presented below :
So, cash flow from operating activities is $ 191,000
Particulars Amount $ Amount $ Net Income 153,000 Adjustment for: Depreciation 27,000 Decrease in Accounts receivable 9,000 Decrease in inventory 4,000 Increase in accrued expenses payable 10,000 50,000 Increase in prepaid expenses -5000 Decrease in accounts payable -7000 -12000 Cash flow from operating activities 191,000Related Questions
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