Exercise 14-2 Net Cash Provided by Operating Activities L014-2] For the just com

Question

Exercise 14-2 Net Cash Provided by Operating Activities L014-2] For the just completed year, Hanna Company had net income of $49,500. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows: December 31 End of Beginning of Year Year Current assets: Cash and cash equivalents Accounts receivable 164,000 192, 000 Inventory Prepaid expenses s 11,000 14, 000 $ 64,000 $85,000 433,000 $ 367,000 Current liabilities: Accounts payable 364,000 $ 388,000 Accrued liabilities 9,000 12, 500 Income taxes payable $ 34,000 $ 27, 000 The Accumulated Depreciation account had total credits of $42.000 during the year. Hanna Company did not record any gains or losses during the year.

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income             49,500.00 Depreciation             42,000.00 Decrease in AR             28,000.00 Increase in inventory           (66,000.00) Decrease in prepaid expensess               3,000.00 Decrease in AP           (24,000.00) Decrease in accrued liabilities             (3,500.00) Increase in Income tax payable               7,000.00 Cash flow from operating activities             36,000.00

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