Question

Nordquist Company's net income last year was $44,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below:

Increases
(Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable $17,500
Inventory $(4,400)
Prepaid expenses $13,000
Accumulated depreciation $32,000
Liability Accounts:
Accounts payable $17,000
Accrued liabilities $(8,900)
Income taxes payable $3,500
Based solely on this information, the net cash provided by operating activities under the indirect method on the statement of cash flows would be:
a) $78,600
b) $113,700
c) $61,500
d) $26,500

Answer 1

Step-by-step explanation:

c) $61,500

Particulars Amount$

Net Income 44,000

Add Decrease in Inventory 4,400

Add Accumulated Depreciation 32,000

Add Increase in Accounts Payable 17,000

Add Increase in Taxes Payable 3,500

Less Increase in Accounts Receivables (17500)

Less Increase in Prepaid Expenses (13,000)

Less Decrease in Accrued Liabilities (8,900)

Net cash provided by operating activities $61,500

under the indirect method