The current sections of Scoggin Inc.\'s balance sheets at December 31, 2014 and

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 $150,060. Depreciation expense was $24,800 2015 2014 Current assets Cash Accounts receivable Inventory Prepaid expenses $105,530 109,350 157,100 26,130 $398,110 $97,660 88,040 172,330 22,460 $380,490 Total current assets Current liabilities Accrued expenses payable Accounts payable $15,010 85,050 ities$100,060 $4,360 92,430 $96,790 Total current liabilities - 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).) SCOGGIN INC Partial Statement of Cash Flows For the Year Ended December 31, 2015 Cash Flows from Operating Activities Net Income 150,060 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 24,800 Increase in Accounts Receivable 21310 Decrease in Inventory Increase in Prepaid Expenses Increase in Accrued Expenses Payable Decrease in Accounts Payable 15,230 3670 10,650 7380 83,040 Net Cash Provided by Operating Activities 233,100

Explanation / Answer

Increase in accounts receivable = $109350 - $88040 = $21310

However, increase in accounts receivable is shown as a negative figure in cash flow statement.

Similarly increase in prepaid expenses shall also be a negative figure.

Decrease in accounts payable shall also be subtracted wile calculating cash flow from operating activities.

Net cash provided by operating activities would be

$150060 - $21310 + $15230 - $3670 + $10650 - $7380 = $168380

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