PB12-2 Computing Cash Flows from Operating Activities (Indirect Method) [LO 12-2

Question

PB12-2 Computing Cash Flows from Operating Activities (Indirect Method) [LO 12-2] The income statement and selected balance sheet information for Calendars Incorporated for the year ended December 31 is presented below Income Statement Sales Revenue $82,000 Expenses Cost of Goods Sold Depreciation Expense Salaries and Wages Expense Rent Expense Insurance Expense Interest Expense Utilities Expense 38,000 16,400 10,400 2,900 1,500 1,400 1,200 Net Income $10,200 Selected Balance Sheet Accounts Ending Beginning Balances Balances Inventory Accounts Receivable Accounts Payable Salaries and Wages Payable Utilities Payable Prepaid Rent Prepaid Insurance 450 2,000 1,240 490 110 90 65 S 530 1,660 1,380 270 120 80

Explanation / Answer

CALENDARS INCORPORATED Cash Flow Statement For year ended 31 December Cash flows from operating activities Net Income $ 10,200 Adjustments to Reconcile Net income to net cash provided by Operating Activities Depreciation expense $ 16,400 Decrease in inventory $          80 Increase in accounts receivable $     (340) Decrease in accounts payable $     (140) Increase in salaries and wages payable $        220 Increase in utilities payable $        110 Decrease in prepaid rent $          30 Decrease in prepaid insurance $          15 $ 16,375 Net cash provided by operating activities $ 26,575

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