Question

MOSS COMPANY
Selected Balance Sheet Information
December 31, 2019 and 2018
2019 2018
Current assets Cash $ 90,150 $ 32,300
Accounts receivable 30,500 43,000
Inventory 65,500 55,200
Current liabilities Accounts payable 41,400 31,200
Income taxes payable 2,600 3,300
MOSS COMPANY
Income Statement
For Year Ended December 31, 2019
Sales $ 539,000
Cost of goods sold 353,600
Gross profit 185,400
Operating expenses Depreciation expense $ 47,000
Other expenses 127,500 174,500
Income before taxes 10,900
Income taxes expense 6,600
Net income $ 4,300
Use the information above to calculate cash flows from operating activities using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Answer:

cash flows from operating activities is $63,000

Explanation:

Cash flow from Operating Activities

Net income before taxes                                         10,900

Adjustments for Non - Cash Items

Depreciation expense                                             47,000

Adjustments for Changes in Working Capital

Decrease in Accounts receivable                           12,500

Increase in Inventory                                              -10,300

Increase in Accounts payable                                 10,200

Cash Generated From Operations                         70,300

Income tax Paid (3,300+6,600- 2,600)                  -7,300

Net Cash from Operating Activities                        63,000

Therefore, cash flows from operating activities is $63,000