Question

The current sections of Ivanhoe Company’s balance sheets at December 31, 2021 and 2022, are presented here. Ivanhoe Company’s net income for 2022 was $165,100. Depreciation expense was $27,300.

2022 2021

Current assets

  Cash  $40,300 $ 57,850

Accounts receivable 55,250 44,850

   Inventory 50,700 40,300

Prepaid expenses 11,050 12,350

Total current assets $157,300 $155,350

Current liabilities

   Accrued expenses payable $ 3,900 $ 10,400

   Accounts payable 57,200 46,800

Total current liabilities $61,100 $ 57,200

Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2022, using the indirect method.

Answer 1

Cash flow from Operating Activities
Net Income		$         1,65,100
Adjustments
Depreciation	$            27,300
Change In current assets & Liabilities
Increase in Accounts Receivable	$           -10,400
Increase in Inventory	$           -10,400
Decrease in Prepaid Expenses	$              1,300
Increase in Accounts payable	$            10,400
Decrease in Accrued Expenses Payable	$             -6,500
Total Adjustments		$             11,700
Net Cash from operating activities			$          1,76,800