Gutierrez Company reported net income of $192,850 for 2015. Gutierrez also repor

Question

Gutierrez Company reported net income of $192,850 for 2015. Gutierrez also reported depreciation expense of S42,900 and a loss of $5,010 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,560 for the year, a $19,210 increase in accounts payable, and a $4,380 decrease in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2015. Use the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

calculation of cash flow from operating activity net income $192,850 add depreciation $42,900 loss of disposal of equipment $5,010 decrease in accounts receivables $15,560 decrease in prepaid expenses $4,380 $67,850 less increase in accounts payable $19,210 $19,210 cash flow from operating activity $241,490

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