The current sections of Sandhill Co.'s balance sheets at December 31, 2021 and 2022, are presented here. Sandhill Co's net income for 2022 was $137,700. Depreciation expense was $24,300. 2022 2021 Current assets $89,100 Cash $94,500 Accounts receivable 72,000 80,100 151,200 Inventory 154,800 Prepaid expenses 24,300 19.800 $342000 $343,800 Total current assets Current liabilities Accrued expenses payable $13,500 $4,500 Accounts payable 76,500 82800 $90,000 Total current liabilities $87.300

Prepare the net cash provided (used) by operating activities section of the company's statement of cash flows for the year ended December 31, 2022, using the indirect method.

Answer and Explanation:

The prepartion of the net cash provided or used by operating activities section of the cash flow statement is presented below:

Cash flows from operating activities

Net income $137,700

Adjustments made

Depreciation expense $24,300

Add: Decrease in Accounts receivable $8,100 ($72,000 - $80,100)

Add: Decrease in inventory $3,600 ($151,200 - $154,800)

Less: Increase in Prepaid expenses - $4,500 ($24,300 - $19,800)

Add: Increase in accrued expenses payable $9,000 ($13,500 - $4,500)

Less: Decrease in accounts payable - $6,300 ($76,500 - $82,800)

Total of adjustments $34,200

Net cash provided by operating activities $171,900

The negative sign represents cash outflow and positive sign represents cash inflow