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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 8 months ago
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