Question

In: Accounting

Lansing Company’s 2017 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2016 and 2017, follow.

Lansing Company’s 2017 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2016 and 2017, follow.

LANSING COMPANY
Income Statement
For Year Ended December 31, 2017
Sales revenue $ 148,200
Expenses    
Cost of goods sold   59,000
Depreciation expense   20,500
Salaries expense   35,000
Rent expense   10,700
Insurance expense   5,500
Interest expense   5,300
Utilities expense   4,500
Net income $ 7,700
 

  

LANSING COMPANY
Selected Balance Sheet Accounts
At December 31 2017   2016  
Accounts receivable $ 7,300   $ 9,200  
Inventory   3,680     2,390  
Accounts payable   6,100     8,000  
Salaries payable   1,220     870  
Utilities payable   560     330  
Prepaid insurance   430     620  
Prepaid rent   560     350  
 

Required:
Prepare the cash flows from operating activities section only of the company’s 2017 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

 
 
LANSING COMPANY
Cash Flows from Operating Activities—Indirect Method
For Year Ended December 31, 2017
Cash flows from operating activities:    
     
Adjustments to reconcile net income to net cash provided by operations:
     
     
     
     
     
     
     
     
    0
    $0

Solutions

Expert Solution

Operating Activities of the Cash Flow Statement of Lansing Ltd for the year ended Dec 31, 2017
Particulars Amount
CASH FLOWS FROM OPERATING ACTIVITIES  
Profit before tax $7,700
Adjustments to reconcile profit before tax to cash provided by operating activities  
Depreciation and amortisation expense $20,500
   
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES $28,200
(Increase) / Decrease in current assets  
Accounts Receivables Decrease $1,900
Inventories (Increase) -$1,290
Prepaid Rent (Increase) -$210
Prepaid Insurance Decrease $190
Increase / (Decrease) in current liabilities  
Accounts Payable (Decrease) -$1,900
Salaries Payable Increase $350
Utilities Payable Increase $230
   
NET CASH GENERATED /(USED) BY OPERATING ACTIVITIES $27,470

 

ekkarill92 answered 3 years ago
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