19 in 2012 jaycox custom bikes had net income of 575 000 jaycox also recorded 215 00 4307116

19 in 2012 jaycox custom bikes had net income of 575 000 jaycox also recorded 215 00 4307116

19) In 2012, Jaycox Custom Bikes had net income of $575,000. Jaycox also recorded $215,000 in depreciation. The company also had the following changes in its balance sheet accounts.

Accounts Receivable $26,000 increase

Inventories 11,000 decrease

Accounts Payable 19,000 decrease

Compute the net cash provided by operating activities using the indirect method.

20) Bearington Motors

Income Statement

For the Year Ended December 31, 2012

Sales $624,000

Less Expenses:

Cost of Goods Sold $332,000

Wage Expense 211,000

Depreciation Expense 20,000

Rent Expense 18,000

Income Tax Expense 16,000 597,000

Net Income $ 27,000

Bearington Motors

Balance Sheet

December 31, 2011 and 2012

12/31/12 12/31/11 12/31/12 12/31/11

Current Assets: Current Liabilities:

Cash $ 8,100 $ 10,600 Accounts Payable $ 57,200 $59,900

Accts. Rec. 66,100 53,400 Wages Payable 17,50011,300

Inventory 27,700 35,900 Taxes Payable 7,1008,200

Prepaid Rent 3,000 4,500 81,80079,400

104,900 104,400              Owners' Equity:

Long-term Assets: Common Stock 75,000 74,000

Fixed Assets 165,500 147,700 Retained Earnings 44,800 43,500

Acc. Depreciation (68,800)(55,200) 119,800              117,500

96,700 92,500               Total Liabilities

Total Assets $201,600 $196,900& Owners' Equity $201,600 $196,900

Determine the net cash flow from operations for Bearington Motors, assuming the company uses the indirect method.

21) After analyzing the following statement of cash flows

1. State the method Pet Halt Services uses to prepare its operating section of the statement of cash flows and explain how you arrived at your answer.

2. Explain why depreciation expense is added back to net income in the operating section of the statement of cash flows.

Pet Halt Services

Statement of Cash Flows (Partial)

For the Month ending January 31, 2012

Cash flows from Operating Activities:

Net Income $120,000

Adjustments to reconcile net income to cash

provided (used) by operating activities

Depreciation expense 18,000

Increase in accounts receivable (29,000)

Increase in accounts payable 33,000

Net cash provided by (used for) operating activities $142,000

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