Hitchcock Exhibit Use the following selected date and additional information fro

Question

Hitchcock Exhibit Use the following selected date and additional information from the records of Hitchcock Corporation to answer the question that follows. Balance Sheet Data 2004 2003 Accounts Receivable $50,000 $40,000 Inventories 22,000 25,000 Prepaid Rent 13,000 5,000 Accounts payable 13,000 20,000 Salaries payable 9,000 15,000 Taxes payable 18,000 11,000 Income Statement Data 2004 Depreciation Expense 6,000 Net Income 50,000 Required: Prepare the Operating Activities section of the Statement of Cash Flows for the year ended 2004. Use the INDIRECT Method.

Explanation / Answer

Hitchcook corporation

Statement of cash flow Indirect method

for the year endedDecember 31, 2004

Detail Amount Amount Cash flow from operating activities Net income 50000 Adjustments Depreciation expenses 6000 Decrease in accounts payable -7000 Increase in accounts receivable -10000 Decrease in inventory 3000 Increase in prepaid rent -8000 Decrease in salary payable -6000 Increase in tax payable 7000 -15000 Net cash flow from opeartaing activities 35000

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