The net income reported on the income statement for the current year was $410,400. Depreciation recorded...

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Accounting

The net income reported on the income statement for the currentyear was $410,400. Depreciation recorded on store equipment for theyear amounted to $17,470. Balances of the current asset and currentliability accounts at the beginning and end of the year are asfollows:
Endof Year Beginning of Year
Cash $39,800 $37,960
Accounts receivable (net) 31,820 27,630
Merchandise inventory 39,230 43,060
Prepaid expenses 3,750 4,820
Accounts payable (merchandisecreditors) 39,770 35,040
Wages payable 20,280 24,950
Required:
A. Prepare the Cash Flows fromOperating Activities section of the statement of cash flows, usingthe indirect method. Refer to the Amount Descriptions list providedfor the exact wording of the answer choices for text entries. Usethe minus sign to indicate cash outflows, cash payments, decreasesin cash and for any adjustments, if required.
B. Briefly explain why net cashflow from operating activities is different than netincome.

	Endof Year	Beginning of Year
Cash	$39,800	$37,960
Accounts receivable (net)	31,820	27,630
Merchandise inventory	39,230	43,060
Prepaid expenses	3,750	4,820
Accounts payable (merchandisecreditors)	39,770	35,040
Wages payable	20,280	24,950

Answer & Explanation Solved by verified expert

4.3 Ratings (626 Votes)

A Cash from operating activitieis net income for the year 410400 Adjustments to reconcile net income to cash from operating activities depreciation expense 17470 See Answer

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A.	Prepare the Cash Flows fromOperating Activities section of the statement of cash flows, usingthe indirect method. Refer to the Amount Descriptions list providedfor the exact wording of the answer choices for text entries. Usethe minus sign to indicate cash outflows, cash payments, decreasesin cash and for any adjustments, if required.
B.	Briefly explain why net cashflow from operating activities is different than netincome.