Connor Limited Reported Net Earnings of $265,000 for the Current

question 36

Essay

Connor Limited reported net earnings of $265,000 for the current year. Depreciation expense recorded on buildings and equipment amounted to $82,000 for the year. Balances of the current assets and current liabilities accounts at the beginning and end of the year are as follows: $$\begin{array} { | l | r | r | } \hline & \text { Beginning of year } & \text { End of year } \\\hline \text { Cash } & \$ 15,000 & \$ 20,000 \\\hline \text { Trade receivables } & 22,500 & 16,500 \\\hline \text { Inventories } & 57,000 & 52,000 \\\hline \text { Prepaid expenses } & 4,000 & 8,500 \\\hline \text { Trade payables } & 18,000 & 14,000 \\\hline \text { Income taxes payable } & 900 & 1,200 \\\hline\end{array}$$ Prepare the operating activities section of the cash flow statement using the indirect method.

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Definitions:

External Environment

All of the external factors, forces, situations, and events outside the organization that affect its performance and strategies.

ESP

Extrasensory perception, a claimed ability to gain information through means other than the known human senses.

Anecdotal Accounts

Personal stories or observations used as evidence, which may not be scientifically validated.

Experiments

Scientific procedures undertaken to make a discovery, test a hypothesis, or demonstrate a known fact through controlled observation and manipulation of variables.