Question

Net income was $67,100; accounts receivable decreased by $19,500; inventory increased by $10,800; proceeds from the issuance of long-term debt were $22,500; accounts payable decreased by $6,200; equipment purchases were $75,000; depreciation and amortization expense was $36,000.

Required: Calculate the net cash provided (used) by operating activities for the period.

Answer 1

The net cash provided (used) by operating activities for the period is $105,600

Step-by-step explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $67,100

Adjustment made:

Add : Depreciation and amortization expense $36,000

Add: Decrease in accounts receivable $19,500

Less: Increase in inventory -$10,800

Less: Decrease in accounts payable -$6,200

Total of Adjustments $38,500

Net Cash flow from Operating activities $105,600