Crane Company reported net income of $172,780 for 2017. Crane
Company also reported depreciation expense of $33,750 and a loss of
$5,470 on the disposal of plant assets. The comparative balance
sheets show an increase in accounts receivable of $14,400 for the
year, a $15,400 increase in accounts payable, and a $3,680 increase
in prepaid expenses.
Prepare the operating activities section of the statement of cash
flows for 2017. Use the indirect method. (Show amounts
that decrease cash flow with either a - sign e.g. -15,000 or in
parenthesis e.g. (15,000).)
Solution:
Crane Company | ||
Statement of Cash Flows (Partial) | ||
For the year Ended 2017 | ||
Particulars | Details | Amount |
Cash Flow from Operating Activities: | ||
Net Income | $172,780.00 | |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation Expense | $33,750.00 | |
Loss on disposal of plant assets | $5,470.00 | |
Increase in accounts receivables | -$14,400.00 | |
Increase in accounts payable | $15,400.00 | |
Increase in prepaid expenses | -$3,680.00 | $36,540.00 |
Net Cash provided by operating activities | $209,320.00 |
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