Additional information:1. Accounts receivable decreased $360,000 during the year.2. Prepaid expenses increased $170,000 during t
he year.3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.4. Accrued expenses payable decreased $100,000 during the year.5. Administrative expenses include depreciation expense of $60,000.Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, for Vince Gill Company, using the indirect method.
1 answer:
Answer and Explanation:
The preparation of cash flows from operating activities is shown below:-
Net Loss $1,050,000
Add:
Decrease in accounts receivable $360,000
Add: Decrease in inventory $300,000
Less: Increase in prepaid expenses ($170,000)
Less: Decrease in accounts payable ($275,000)
Less: Decrease in accrued expenses
payable ($100,000)
Add: Depreciation $60,000 $175,000
Cash flows from operating activities $1,225,000
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