Question

The following information is available from the current period financial statements:

Net income	$ 140,777
Depreciation expense	$37,106
Increase in accounts receivable	$15,470
Decrease in accounts payable	$23,634

The net cash flow from operating activities using the indirect method is

Answer 1

Cash Flow Statement (partial)
A. Cash Flows from Operating Activity
Net Income		$    140,777.00
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation expense	$      37,106.00
Increase in Accounts receivables	$    (15,470.00)
Decrease in Accounts payables	$    (23,634.00)
		$      (1,998.00)
Net cash flow from Operating activities		$    138,779.00

General notes for cash flow

Cash is increased when Current liability increase or Current asset Decrease.

Cash is Decreased when Current liability Decrease or Current asset Increase.

Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash

Profit on sale of asset or investment is a non cash profit and hence will be deducted from operating income.