Lansing Company’s current-year income statement and selected balance sheet data at December 31 of the current...

Lansing Company’s current-year income statement and selected balance sheet data at December 31 of the current and prior years follow.

LANSING COMPANY Income Statement For Current Year Ended December 31
Sales revenue	$	157,200
Expenses
Cost of goods sold		62,000
Depreciation expense		22,000
Salaries expense		38,000
Rent expense		11,000
Insurance expense		5,800
Interest expense		5,600
Utilities expense		4,800
Net income	$	8,000

LANSING COMPANY Selected Balance Sheet Accounts
At December 31	Current Year			Prior Year
Accounts receivable		$	7,600		$	9,800
Inventory			3,980			2,540
Accounts payable			6,400			8,600
Salaries payable			1,280			900
Utilities payable			620			360
Prepaid insurance			460			680
Prepaid rent			620			380

Required:
Prepare the operating activities section of the statement of cash flows using the indirect method for the current year. (Amounts to be

Solutions

Expert Solution

Solution:

LANSING COMPANY
Statement of Cash Flows (Indirect Method)
For the Current Year Ended December 31
Cash flows from operating activities:
Net Income	$ 8,000
Adjustments to reconcile to operating cash flow
Depreciation expense	$ 22,000
Changes in operating assets and liabilities:
Decrease in Account Receivables	$ 2,200
Increase in inventory	$ (1,440)
Decrease in accounts payable	$ (2,200)
Increase in salaries payable	$ 380
Increase in utilities payable	$ 260
Decrease in prepaid insurance	$ 220
Increase in prepaid rent	$ (240)

Net cash flows from operating activities		$ 29,180

ekkarill92 answered 2 months ago

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