Selected balance sheet information and the income statement for Fountainhead Cor

Question

Selected balance sheet information and the income statement for Fountainhead Corporation for the current year are presented below Selected Balance Sheet Accounts Prior Year Current Year $ 16,400 $11,000 24,200 Accounts Receivable Merchandise Inventory Prepaid Rent Accounts Payable Salaries and Wages Payable 22,000 1,200 12,200 2,400 15,600 3,600 Income Statement $330,000 Sales Revenue Expenses Cost of Goods Sold Depreciation Expense Salaries Expense Rent Expense Insurance Expense Interest Expense Utilities Expense 196,000 22,000 33,000 13,200 13,200 12,100 11,000 Net Income $ 29,500

Explanation / Answer

Cash flow from Operating Activities: Net income 29500 Adjustments to reconcile net income to net cash provided by Operating Activities Depreciation expense 22000 Changes in Current assets and Current liabilities: Increase in Accounts Receivable -5400 Decrease in Merchandise inventory 2200 Increase in Preapid rent -1200 Decrease in Accounts payable -3400 Decrease in Salaries and wages payable -1200 Net cash provided by Operating Activities 42500

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