Question

Lacey Company prepared the tabulation below at December 31, 2022. Net Income $310,000
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense $45,000
Increase in accounts receivable $55,000
Decrease in inventory $12,000
Increase in accounts payable $6,000
Increase in prepaid expenses $4,000
Decrease in income taxes payable $3,500
Gain on disposal of land $7,500
Net cash provided (used) by operating activities

Show how each item should be reported in the statement of cash flows.

Answer 1

Answer:

Net cash provided by operating activities is $325,000.

Explanation:

Lacey Company

Cash Flow Statement (Operating Activities Only)

December 31, 2022.

Details                                                                       Amount ($)

Net Income                                                                   310,000

Depreciation expense                                                  45,000

Increase in accounts receivable                                 (55,000)

Decrease in inventory                                                   12,000

Increase in accounts payable                                        6,000

Increase in prepaid expenses                                      (4,000)

Decrease in income taxes payable                               3,500

Gain on disposal of land                                                 7,500

Net cash provided (used) by operating activities   325,000