NEXT MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK

NEXT MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK Exercise 13-4 Your answer is partially correct. Try again. Gutierrez Company reported net income of $225,000 for 2017, Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on disposal of the equipment. The comparative balance sheet shows a decrease in accounts receivable of s15,000 for the year, a $17.000 increase in accounts payable, and a $4.000 decrease in prepaid expenses Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method. (Show amounts that decrease cash flow with either a sign e.g. 15.000 or in parenthesis e.g. (15-000).) GUTIERREZ COMPANY Partial Statement of Cash Flows For the Year Ended Dec Cash Flows from Operating Activities Net Income 225,000 Adjustments to reconcile net income to Net Cash Provided by Oper ting Activities y Depreciation Expense Loss on Disposal of Equipment ? Loss on Disposal of Equipment Decrease in Accounts Receivable v 45,000 5,000 17,000 15,000 All Rights Reserved. A Division of John. Willey.&Sons.Ins; Version 4.24.7.7

Solution

Increase in accounts payable increases operating cash flow. Increase in operating liability increases operating cash flows and vice-versa.

Hence, For red lined row Select “increase in accounts payable $17,000”