Prepare the operating section of cash ?ows for the year

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Reference no: EM131815641

Question: Reconciling and Computing Operating Cash Flows from Net Income (LO1)

Petroni Company reports the following selected results for its current calendar year.

465_Net income.png

Required: a. Prepare the operating section only of Petroni Company's statement of cash ?ows for the year.

b. Does the positive sign on depreciation expense indicate that the company is generating cash by recording depreciation? Explain.

c. Explain why the increase in accounts receivable is a use of cash in the statement of cash ?ows.

d. Explain why the decrease in prepaid expense is a source of cash in the statement of cash ?ows.

Reference no: EM131815641

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