And please explain how did you find the numbers too. HORIZON TELECOM Income Stat

Question

And please explain how did you find the numbers too.

HORIZON TELECOM Income Statement For the Year Ended December 31, 2018 $616,000 Revenues Expenses: ost of goods sold Operating expenses Depreclation expense ncome tax expense $367,000 111,000 29,000 54,500 lotal expenses 561,500 Net Income $ 54,500 HORIZON TELECOM Selected Balance Sheet Data December 31, 2018 Increase in accounts receivable Increase in inventory Decrease in prepaid rent Increase in operating expenses payable Decrease in accounts payable Increase in income tax payable $ 5,200 11,100 10,900 6,100 7,000 21,900

Explanation / Answer

HORIZON TELECOM

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,2018

IN INDIRECT METHOD CASH FLOWS FROM OPERATING ACTIVITIES ARE CALCULATED AS FOLLOWS

ADD NON CASH AND NON OPERATING EXPENSES TO NET INCOME

THEN MAKE ADJUSTMENTS AS FOLLOWS

LESS INCREASE IN CURRENT ASSETS

ADD DECREASE IN CURRENT ASSETS

ADD INCREASE IN CURRENT LIABILITIES

LESS DECREASE IN CURRENT LIABILITIES

CASH FLOWS FROM OPERATING ACTIVITIES    NET INCOME BEFORE TAXES(54500+54500) $109000 ADJUSTMENT FOR NON-CASH EFFECTS: DEPRECIATION EXPENSES + 29000 OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 138000 INCREASE IN ACCOUNTS RECEIVABLES -5200 132800 INCREASE IN INVENTORY -11100 121700 DECREASE IN PREPAID RENT +10900 132600 DECREASE IN ACCOUNTS PAYABLE -7000 125600 CASH GENERATED FROM OPERATIONS 125600 INCOME TAX PAID CURRENT YEAR -54500 INCREASE -21900 -76400 NET CASH GENERATED FROM OPERATING ACTIVITY 49200

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