Question

xercise 17-05 (Video)

The current sections of Scoggin Inc.’s balance sheets at December 31, 2019 and 2020, are presented here.

Scoggin’s net income for 2020 was $152,700. Depreciation expense was $24,300.

		2020		2019
Current assets
Cash		$107,100		$95,300
Accounts receivable		109,200		78,300
Inventory		157,800		171,100
Prepaid expenses		26,100		25,300
Total current assets		$400,200		$370,000
Current liabilities
Accrued expenses payable		$15,300		$9,900
Accounts payable		84,700		95,300
Total current liabilities		$100,000		$105,200

Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2020, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

SCOGGIN INC. Partial Statement of Cash Flows For the Month Ended December 31, 2020For the Year Ended December 31, 2020December 31, 2020
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease in Accounts Receivable    Increase in Accounts Receivable    Decrease in Inventory    Increase in Prepaid Expenses    Increase in Accounts Payable    Net Income    Decrease in Accounts Payable    Decrease in Prepaid Expenses    Depreciation Expense    Increase in Accrued Expenses Payable    Increase in Inventory    Decrease in Accrued Expenses Payable		$
Adjustments to reconcile net income to
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease in Accrued Expenses Payable    Increase in Accounts Receivable    Decrease in Accounts Receivable    Net Income    Depreciation Expense    Decrease in Prepaid Expenses    Increase in Prepaid Expenses    Decrease in Inventory    Decrease in Accounts Payable    Increase in Accrued Expenses Payable    Increase in Accounts Payable    Increase in Inventory	$
Decrease in Accounts Receivable    Net Income    Decrease in Inventory    Increase in Inventory    Increase in Accrued Expenses Payable    Decrease in Prepaid Expenses    Depreciation Expense    Decrease in Accrued Expenses Payable    Increase in Prepaid Expenses    Decrease in Accounts Payable    Increase in Accounts Payable    Increase in Accounts Receivable
Decrease in Inventory    Decrease in Accounts Payable    Increase in Prepaid Expenses    Decrease in Accrued Expenses Payable    Decrease in Prepaid Expenses    Increase in Inventory    Increase in Accounts Payable    Decrease in Accounts Receivable    Increase in Accounts Receivable    Net Income    Increase in Accrued Expenses Payable    Depreciation Expense
Increase in Accrued Expenses Payable    Decrease in Accrued Expenses Payable    Increase in Prepaid Expenses    Decrease in Accounts Payable    Decrease in Prepaid Expenses    Increase in Inventory    Increase in Accounts Payable    Decrease in Accounts Receivable    Increase in Accounts Receivable    Net Income    Depreciation Expense    Decrease in Inventory
Depreciation Expense    Decrease in Inventory    Decrease in Accrued Expenses Payable    Increase in Inventory    Decrease in Prepaid Expenses    Increase in Prepaid Expenses    Decrease in Accounts Payable    Increase in Accrued Expenses Payable    Increase in Accounts Payable    Increase in Accounts Receivable    Decrease in Accounts Receivable    Net Income
Decrease in Accrued Expenses Payable    Increase in Accrued Expenses Payable    Depreciation Expense    Decrease in Inventory    Increase in Prepaid Expenses    Increase in Inventory    Increase in Accounts Receivable    Decrease in Prepaid Expenses    Decrease in Accounts Receivable    Decrease in Accounts Payable    Net Income    Increase in Accounts Payable
Cash at Beginning of Period    Cash at End of Period    Cash Flows from Financing Activities    Cash Flows from Investing Activities    Cash Flows from Operating Activities    Net Cash Provided by Financing Activities    Net Cash Provided by Investing Activities    Net Cash Provided by Operating Activities    Net Cash Used by Financing Activities    Net Cash Used by Investing Activities    Net Cash Used by Operating Activities    Net Decrease in Cash    Net Increase in Cash		$

Answer 1

Answer

• Requirement asked

SCOGGIN INC.
Partial Statement of Cash Flows
for the year ended 31 Dec 2020
Cash flows from Operating activities
Net Income		$152,700
Adjustments to reconcile net income to
Net cash provided by Operating activities
Depreciation expense	$24,300
Increase in account receivables	($30,900)
Decrease in Inventory	$13,300
Increase in prepaid expenses	($800)
Increase in Accrued expenses Payable	$5,400
Decrease in accounts payable	($10,600)
		$700
Net Cash provided by Operating activities		$153,400

No.	Conceptual Notes
1	Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2	Effects of Non - Cash Transaction are adjusted from Net Income.
3	Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4	Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5	Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income