Question

Gutierrez Company reported net income of $193,400 for 2017. Gutierrez also reported depreciation expense of $45,600 and a loss of $6,000 on disposal of equipment. The comparative balance sheet shows an decrease in accounts receivable of $11,000 for the year, a $13,000 increase in accounts payable, and a $5,000 decrease in prepaid expenses.
Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.

Answer 1

Answer:

$274,000

Explanation:

Gutierrez Company Statement of Cash Flows For Year Ended December 31, 2017

Cash flows operating activities

Net income$193,400

Add Reconciling adjustments to net income to netcash provided by activities:

Depreciation expense$45,600

Loss on Sale of equipment $6,000

Increase in Accounts payable $13,000

Decrease in Accounts receivable $11,000

Decrease in Prepaid expenses $5,000

Net cash operating activities$ 274,000