172 The current sections of Donny Inc.\'s balance sheets at December 31, 2016 an

Question

172 The current sections of Donny Inc.'s balance sheets at December 31, 2016 and 2017, are presented here. Donny's net income for 2017 was $203,000. Depreciation expense was $25,000. 2017 2016 Current assets Cash Accounts receivable Inventory Prepaid expense $115,000 $99,000 105,000 89,000 154,000 172,000 27,00021,000 Total current assets 401,000 $381,000 Current Blabilities Accrued expenses payable $15,000 85,00093,000 $5,000 Accounts payable Total current liabilities Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2017, using the indirect method. (Sho amounts that decrease cash flow with elther a -sign e.g. -15,000 or in parenthesis e.g.(15,000).) DONNY INC. Partial Statement of Cash Flows For the Year Ended December 31, 2017 Adjustments to reconcile net income to LINK TO TEXT

Explanation / Answer

Solution.

Preparation of cash Flow from operating activity under Indirect method.

DONY INC. Partial Statement of Cash Flows For the year Ended December 31, 2017 Amount Amount Cash Flow From operating Activities: Net Income             203,000 Adjustment to reconcile net income to Add: Non cash Expenses Depreciation Expense                    25,000 Increase in Account receivable                  (16,000) Decrease in Inventory                    18,000 Increase in prepaid expense                    (6,000) Increase in accured expense payable                    10,000 Decrease in Account payable                    (8,000)                23,000 Net cash flow from opereting activity             226,000

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