Question

Metlock, Inc. reported net income of $205,840 for 2022. Metlock, Inc. also reported depreciation expense of $37,750 and a loss of $4,660 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $15,940 for the year, a $15,790 increase in accounts payable, and a $4,300 increase in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2022. 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).)

Answer 1

Please see below

Step-by-step explanation:

Metlock Inc.

Preparation of Operating activities section of the statement of cash flows for 2022

Net income

$205,840

Adjustment to reconcile net income

to net cash provided by operating activities

Depreciation expense

$37,750

Loss on disposal of plant asset

$4,660

Account receivable increase

($15,940)

Prepaid expense increase

($4,300)

Accounts payable decrease

$15,790

Net cash provided by operating activities

$243,800