Question

In: Accounting

Partial information from the comparative balance sheet of Jackson Company as of December 31, 2020 and...

Partial information from the comparative balance sheet of Jackson Company as of December 31, 2020 and 2019 reflected the following selected account balances. From the information contained on the balance sheet and the additional information below, prepare the Net Cash Flows from Operating activities to answer the following two questions.

Jackson Company

Comparative Balance Sheet Partial Information

2020 2019

Current Assets:

Cash $114,000 $100,000

Accounts receivable 18,400 20,700

Inventory 62,200 59,600

Current Liabilities:

Accounts payable 29,300 26,600

Accrued liabilities 9,700 10,100

Additional information:

Net income 69,000

Depreciation expense 8,000

Question:

What is the amount of the total adjustments to net income (total of the adjustments column)?

	a.	$10,800
	b.	$12,400
	c.	$10,000
	d.	$7,700

See the previous question. How much is the net cash flows from operating activities?

	a.	$79,000
	b.	$64,000
	c.	$8,400
	d.	$12,400

Expert Solution

Question 1

Correct answer--------------(c) $10,000

Question 2

Correct answer--------------(a) $79,000

Working

Jackson Company
Statement of Cash Flows-Partial
For year Ended December 31 2020
A. Cash Flows from Operating Activity
Net Income		$ 69,000.00
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation expense	$ 8,000.00
Changes in current operating assets and liabilities:
Increase in Inventory	$ (2,600.00)
Increase in Accounts Payable	$ 2,700.00
Decrease in Accrued liabilities	$ (400.00)
Decrease in Accounts Receivables	$ 2,300.00
		$ 10,000.00
Net cash flow from Operating activities		$ 79,000.00

ekkarill92 answered 1 year ago

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