Brief Exercise 126 The comparative balance sheets for Bonita

Brief Exercise 12-6 The comparative balance sheets for Bonita Industries show these changes in noncash current asset accounts: accounts receivable decreased $76,800, prepaid expenses increased $25,200, and inventories increased $40,900. Compute net cash provided by operating activities using the indirect method, assuming that net income is $195,300. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Bonita Industries Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to

Solution

Cash flow from operating activities: Net income 195300 Adjustments to reconcile net income to Decrease in AR 76800 Increase in prepaid expenses (25200) Increase in inventory (40900) 10700 Net Cash flow from operating activities $206000.