Question

In preparing a company's statement of cash flows using the indirect method, the following information is available:Net income $ 52,000Accounts payable decreased by 18,000Accounts receivable increased by 25,000Inventories increased by 5,000Depreciation expense 30,000Net cash provided by operating activities was:

Answer 1

Statement of cash flows using the indirect method

Net income $52,000

Adjustments to net income:

• Depreciation expense $30,000
• Increase in accounts receivable ($25,000)
• Increase in inventories ($5,000)
• Decrease in accounts payable ($18,000) ($18,000)

net cash flow provided by operating activities $34,000