Question Details

Show how each item should be reported in the statement 



Ex. 1
Towson Company prepared the tabulation below at December 31, 2014.
Net Income		$340,000
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation expense, $43,000			
	Increase in accounts receivable, $50,000			
	Decrease in inventory, $13,000			
	Amortization of patent, $4,000			
	Increase in accounts payable, $5,600			
	Decrease in interest receivable, $7,000			
	Increase in prepaid expenses, $6,000			
	Decrease in income taxes payable, $1,500			
	Gain on sale of land, $5,000			
	Net cash provided (used) by operating activities			
Instructions
Show how each item should be reported in the statement of cash flows. Use parentheses for deductions.


Ex. 2
The current sections of Donny Inc.'s balance sheets at December 31, 2013 and 2014, are presented here.
Donny's net income for 2014 was $203,000. Depreciation expense was $25,000.
	   2014  	  2013	
	Current assets 
	    Cash	$115,000	$99,000
	    Accounts receivable	105,000	89,000
	    Inventory 	154,000	 172,000
	    Prepaid expense	    27,000	   21,000
	           Total current assets	$401,000	$381,000
	Current liabilities 
	    Accrued expenses payable	$  15,000	$  5,000
	    Accounts payable	    85,000	   93,000
	           Total current liabilities	$100,000	$ 98,000

Instructions
Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2014, using the indirect method.




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