The current sections of Blue Spruce Corp.’s balance sheets at December 31, 2019 and 2020, are presented here. Blue Spruce’s net income for 2020 was $151,700. Depreciation expense was $24,300. 2019 2018 Current assets Cash $103,000 $98,300 Accounts receivable 108,400 77,900 Inventory 157,700 171,100 Prepaid expenses 26,500 25,100 Total current assets $395,600 $372,400 Current liabilities Accrued expenses payable $15,400 $9,100 Accounts payable 85,200 95,300 Total current liabilities $100,600 $104,400 Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2020, using the indirect method.

Answer and Explanation:

The preparation of net cash provided by operating activities is shown below:-

                                          Blue Spruce Corp.’s

                               Partial Statement of Cash Flows

                     For the Year Ended December 31, 2020

Particulars                                    Amount

Net cash flow from operating

activities

Net income                                                         $151,700

Adjustments to reconcile

net income to net cash

provided by operating activities

Depreciation expense                  $24,300

Increase in Accrued

Expense payable                            $6,300    

($15,400 - $9,100)

Decrease in inventory                    $13,400    

($157,700 - $171,100)

Increase in prepaid insurance       ($1,400)    

($26,500 - $25,100)

Increase in accounts receivable   ($30,500)  

($108,400 - $77,900)

Decrease in accounts payable       ($10,100)       $2,000

($85,200 - $95,300)

Net cash provided by

operating activities                                               $153,700