Question

Fictitious information is provided below. Answer both required questions. **Be sure to show your work in detail. Not doing so will result in reduced or no credit given.

For the year recently completed, TeamLogicIT had net income of $35,000. Balances in the company's current asset and current liability accounting for the beginning and ending of the year were as follows:

	End of Year	Beginning of Year
Current assets:
Cash and cash equivalents	$30,000	$40,000
Accounts receivable	$125,000	$106,000
Inventory	$213,000	$180,000
Prepaid expenses	$6,000	$7,000
Current liabilities:
Accounts payable	$210,000	$195,000
Accrued liabilities	$4,000	$6,000
Income taxes payable	$34,000	$30,000

Also, the accumulated depreciation account had total credits of $20,000 during the year. TeamLogicIT did not record any gains or losses during the year.

**Based on the above and in consideration of the indirect method, determine the net cash provided by operating activities for the year.

Answer 1

Cash flows statement (partial)
Cash flows from operating Activities:
Net income		35,000
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation Expense	20,000
Increase in Accounts Receivable	-19,000
Increase in Inventory	-33,000
Decrease in Accounts Receivable	1,000
Increase in Accounts Payable	15,000
Decrease in Accrued liabilties	-2,000
Increase in Income taxes payable	4,000
		-14,000
Net cash provided by operating activities		21,000