Question

MOSS COMPANYSelected Balance Sheet InformationDecember 31, 2017 and 2016 2017 2016Current assets Cash $91,150 $33,300Accounts receivable 31,500 45,000Inventory 66,500 55,400Current liabilities Accounts payable 43,400 32,200Income taxes payable 2,700 3,500 MOSS COMPANYIncome StatementFor Year Ended December 31, 2017Sales $549,000Cost of goods sold 357,600Gross profit 191,400Operating expenses Depreciation expense $49,000 Other expenses 128,500 177,500Income before taxes 13,900Income taxes expense 8,100Net income $ 5,800 Use the information above to calculate this company’s cash flows from operating activities using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Answer:

$67,600

Explanation:

Calculation for the company’s cash flows from operating activities using the indirect method

Cash flows from operating activities

Net income 5,800

Adjustments to reconcile net income to operating cash flow

Depreciation 49,000

Accounts receivable decrease 13,500

(31,500-45,000)

Inventory increase (11,100)

(66,500-55,400)

Accounts payable increase 11,200

(43,400-32,200)

Income taxes payable decrease(800)

(2,700-3,500)

Net cash provided by operating activities $67,600

Therefore the company’s cash flows from operating activities using the indirect method will be $67,600