Question

Electronic Wonders reports net income of $96,500. The accounting records reveal Depreciation Expense of $50,200 as well as increases in Prepaid Rent, Accounts Payable, and Income Tax Payable of $38,500, $23,900, and $20,400, respectively. Prepare the operating activities section of Electronic Wonders' statement of cash flows using the indirect method. (Amounts to be deducted and negative values should be indicated by minus sign.)

Answer 1

Answer:

$152,500

Explanation:

Preparation of the operating activities section of Electronic Wonders' statement of cash flows using the indirect method

Cash flows from operating activities:

Net Income $96500

Adjustments for noncash effects:

Depreciation expense $50,200

Changes in current assets and current liabilities:

increase in accounts payable $23,900

Increase in income tax payable $20,400

Less Increase in prepaid rent ($38,500)

Net cash flows from operating activities $152,500

Therefore the operating activities section of Electronic Wonders' statement of cash flows using the indirect method is $152,500