For the just completed year, hanna company had net income of $101,500. balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows:
december 31
end of year beginning of year
current assets:
cash $ 59,000 $ 82,000
accounts receivable $170,000 $188,000
inventory $442,000 $340,000
prepaid expenses $11,500 $13,000
current liabilities:
accounts payable $352,000 $396,000
accrued liabilities $9,000 $12,000
income taxes payable $35,000 $26,000
the accumulated depreciation account had total credits of $54,000 during the year. hanna company did not record any gains or losses during the year.
required:
1. using the indirect method, determine the net cash provided by operating activities for the year. (list any deduction in cash and cash outflows as negative amounts.)

Hanna Company's Net cash flow from operating activities is $35,000

Explanation:

Net Income for the year                                                      $101,500    

Adjustment of Non Cash Expenses:  

Depreciation                                                                             $54,000  

Decrease in Prepaid Expenses                                             $1,500  

Decrease in Accrued Liabilities                                             $(3,000)

Increase in Tax Payable                                                     $9,000  

Operating profit before working capital changes              $163,000  

Working Capital Changes:  

Increase in Inventory                                                             $(102,000)

Decrease in Accounts Receivables                                     $18,000  

Decrease in Accounts Payable                                             $(44,000)

Net cash from operating activities                                     $35,000  

Please note that figures in brackets represent Cash Outflows (negative values)