Question: Reconciling and Computing Operating Cash Flows from Net Income (LO1)
Petroni Company reports the following selected results for its current calendar year.
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.