Accounting Question
Accounting Question
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“Cash Flows” Please respond to the following:
E12-4 The current sections of Sunn Inc.’s balance sheets at December 31, 2016 and 2017, are presented here. Sunn’s net income for 2017 was $153,000. Depreciation expense was $27,000.
| 2017 | 2016 | |
| Current assets | ||
| Cash | $105,000 | $ 99,000 |
| Accounts receivable | 80,000 | 89,000 |
| Inventory | 168,000 | 172,000 |
| Prepaid expenses | 27,000 | 22,000 |
| Total current assets | $380,000 | $382,000 |
| Current liabilities | ||
| Accrued expenses payable | $ 15,000 | $ 5,000 |
| Accounts payable | 85,000 | 92,000 |
| Total current liabilities | $100,000 | $ 97,000 |
Instructions
Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2017, using the indirect method. Suggest a meaning for this number.
Prepare statement of cash flows—indirect method.
