Question

Hogan Company had the following account balances for 2021: Dec. 31 Jan. 1 Accounts receivable $ 40,500 $ 36,500 Accounts payable 64,000 51,000 Prepaid insurance 17,500 8,000 Hogan reported net income of $390,000 for 2021. Assuming no other changes in current account balances, what is the amount of net cash provided by operating activities for 2021 reported in the statement of cash flows?+

Answer 1

Answer:

The amount of net cash provided by operating activities for 2021 reported in the statement of cash flows is $389,500.

Explanation:

Hogan Company

Statement of cash flows (extract)

Net income                                                          $390,000

Add: Increase in Accounts payable                      $13,000

Less: Increase in Accounts receivable                 ($4,000)

Less: Increase in Prepaid insurance                     ($9,500)

Net cash flows from operating activities         $389,500