For the just completed year, Hanna Company had net income of $41,500. Balances in the companys 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 and cash equivalents $ 57,000 $ 78,000
Accounts receivable $ 162,000 $ 188,000
Inventory $ 442,000 $ 370,000
Prepaid expenses $ 11,500 $ 14,000
Current liabilities:
Accounts payable $ 370,000 $ 384,000
Accrued liabilities $ 8,500 $ 12,000
Income taxes payable $ 36,000 $ 27,000
The Accumulated Depreciation account had total credits of $48,000 during the year. Hanna Company did not record any gains or losses during the year.
Required: Use the indirect method to determine the net cash provided by (or used in) operating activities for the year.

$37,500

Explanation:

The computation of the net cash provided or used by operating activities are as follows

Cash flow from operating activities

Net income                          $41,500

Add: depreciation expenses $48,000

Add: Decrease in account receivable ($162,000 - $188,000) $26,000

Less: Increase in inventory ($442,000 - $370,000)  -$72,000

Add: Decrease in prepaid expenses ($11,500 - $14,000)  $2,500

Less: Decrease in account payable ($370,000 - $384,000) -$14,000

Less: Decrease in accrued liabilities ($8,500 - $12,000) -$3,500

Add: Increase in income tax payable ($36,000 - $27,000) $9,000

Cash flow provided by operating activities $37,500

The negative sign indicates the cash outflow and the positive sign indicated the cash inflow

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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