The net income reported on the income statement for the current year was S128,00

Question

The net income reported on the income statement for the current year was S128,000. Depreciation recorded on store equipment for the year amounted to $21,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable $51,200 36,710 50,120 5,630 47,970 26,210 $47,100 34,810 52,990 4,470 44,560 29,110 i) Based on the preceding information, convert relevant information into mathematical forms, consistently appropriate for the task at hand by preparing the Cash Flow from Operating Activities section of the statement of cash flows, using the indirect method. i) Express quantitative information to show an understanding, and or purposes of your work by for instance explaining why net cash flows from operating activities is different from net income. ii) Provide an accurate, full and complete explanation and implication of the information presented in (mathematical forms) by explaining the significance of the cash flow statement iv) Engage in a comprehensive process that uses t judgments, drawing accurate conclusions from company is doing financially.( for instance was there and net cash inflow or outflow). he quantitative analysis of data as the basis for making this work by providing an opinion of how well the

Explanation / Answer

Cash flow from operating activities Methematical equation Amount Net Income 128000 Add : Depreciation 21100 Less : Increase in Account Receivable -1900 Add : Decrease in Merchandise Inventory 2870 Less : Increase in Prepaid expenses -1160 Add : Increase in Accounts payable 3410 Less : Decrease in Wages payable -2900 Cash flow from operating activities 149420 Company is doing good job as there is positive cash flow from operating activities

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