Determining Net Income from Net Cash Flow frem Operating Activities Sanhueza, In

Question

Determining Net Income from Net Cash Flow frem Operating Activities Sanhueza, Inc, reported a net cash flow from operating actlvities of $189,000 on its statement of cash flows for the vear ended December 31 following i Decrease in income taxes payable Decrease in inventories Depreciation Gain on sale of investments Increase in accounts payable Increase in prepaid expenses Increase in accounts recelvable n the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method $4,000 10,000 15,400 6,900 2,800 1,700 ,500 Determine the net income reported by Sanhueza, Inc, for the year ended December 31, 2016 ) 179,400 Typically net income is the starting pont of the statement of cash nows when using the indirect method to calou the net cash ow om hare the ntermabon pren been used to nt net none to retcash toton operateg achter? How can ret same rfomnon be used to now caine net sperating adtves ? Rewew accrual accounting where evenes ane recorded when eamed and expenses are necorded when incured How does s dffer with the concept of ca payments and receps? Leaming obiv 8 9 4 shift

Explanation / Answer

Solution: Net    income =181,800 working Notes: Cash flow from operating activities 189,900 Add: Decrease in income taxes payable 4,000 Gain on sale of investments 6,900 Increase in prepaid expenses 1,700 Increase in accounts receivable 7,500 20,100 Less: Increase in accounts payable 2,800 Depreciation 15,400 Decrease in inventories 10,000 -28,200 Net Income 181,800 Note that amount of increase in accounts payable is not readable clearly check if it is different then just change that amount your answer will match. Please feel free to ask if anything about above solution in comment section of the question.

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