Answer:
$619,000 and $385,500
Explanation:
In case of S company
Cash flow from Operating activities - Indirect method
Net income $440,000
Adjustment made:
Add : Depreciation expense $107,000
Less: Gain on sale of land - $148,000
Less: Increase in accounts receivable -$83,000
Add: Decrease in inventory $63,000
Add: Increase in accounts payable $240,000
Total of Adjustments $179,000
Net Cash flow from Operating activities $619,000
In case of Hogan company
Cash flow from Operating activities - Indirect method
Net income $390,000
Adjustment made:
Less: Increase in accounts receivable - $7,000 ($40,000 - $33,000)
Add: Increase in accounts payable $10,500 ($64,500 - $54,000)
Less: Increase in prepaid insurance -$8,000 ($17,500 - $9,500)
Total of Adjustments -$4500
Net Cash flow from Operating activities $385,500
