Question

Exercise 183 Wayne Company reported net income of $265,000 for 2020. Wayne also reported depreciation expense of $45,000 and a loss of $8,000 on the sale of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $6,000 decrease in prepaid expenses.Prepare the operating activities section of the statement of cash flows for 2020. Use the indirect method.

Answer 1

Net cash flow of the operating activities is $356,000

Step-by-step explanation:

Wayne Company

Partial statement of Cash flow

For the year Ended December 31, 2021

Cash flow from operating activities:

Net Income $265,000

Adjustment to reconcile net income to net

cash provided by operating activities

Depreciation expenses $45,000

Loss on sale of equipment $8,000

Decrease in accounts receivable $15,000

Decrease in prepaid expenses $6,000

Increase in accounts payable $17,000 $91,000

Net cash provided by operating activities $356,000