Consider the following: Net income, $285,000 Depreciation Expense $33,000 Increase in accounts receivable, $12,000 Decrease in...

Consider the following: Net income, $285,000 Depreciation Expense $33,000 Increase in accounts receivable, $12,000 Decrease in merchandise inventory, $60,000 Decrease in accounts payable, $24,000 Increase in income taxes payable, $9,000 Using the Indirect Method, the Net Cash provided by Operating Activities was: Group of answer choices $351,000 $303,000 $318,000 $270,000

Expert Solution

Answer: $351,000

.

Partial Statement of Cashflows
Cash Flows from Operating Activities:
Net Income		$285,000
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation expense	$33,000
Increase in accounts receivable	($12,000)
Decrease in merchandise inventory	$60,000
Decrease in accounts payable	($24,000)
Increase in income tax payable	$9,000
		$66,000
Net Cash Provided by Operating Activities		$351,000

.

Note:

1. Depreciation expense: As depreciation expense is a non-cash expense, it has to be added back to the net income.

2. Increase in current assets is treated as a cash outflow

3. Decrease in current assets is treated as a cash inflow

4. Increase in current liability is treated as a cash inflow

5. Decrease in current liability is treated as a cash outflow

ekkarill92 answered 1 year ago

Ocean Pines Company had net income $525,000. They also had depreciation expense of $200,000, an increase or (decrease) in accounts receivable of $-30,000, and an increase or (decrease) in inventory of $-25,000

Ocean Pines Company had net income $525,000. They also had depreciation expense of $200,000, an increase or (decrease) in accounts receivable of $-30,000, and an increase or (decrease) in inventory of $-25,000. Ocean Pines prepares their Statement of Cash Flows using the indirect method. Use this information to determine the dollar value of cash provided or (used) by operating activities. If the total is a use of cash, enter as a negative number. (a negative number for accounts receivable or...

A company had net income of $210000. Depreciation expense is $27000. During the year, Accounts Receivable...

A company had net income of $210000. Depreciation expense is $27000. During the year, Accounts Receivable and Inventory increased $17000 and $42000, respectively. Prepaid Expenses and Accounts Payable decreased $5000 and $6000, respectively. There was also a loss on the sale of equipment of $2000. How much cash was provided by operating activities? $179000 $241000 $271000 $175000

A company had net income of $226,932. Depreciation expense was $25,699. During the year, accounts receivable...

A company had net income of $226,932. Depreciation expense was $25,699. During the year, accounts receivable and inventory increased by $15,649 and $27,550, respectively. Prepaid expenses and accounts payable decreased by $3,313 and $6,060, respectively. There was also a loss on the sale of equipment of $6,825. How much was the net cash flow from operating activities on the statement of cash flows using the indirect method?

Net Income $5,000 Depreciation 2,500 increase in deferred tax liabilities 500 Decrease in account receivable ...

Net Income $5,000 Depreciation 2,500 increase in deferred tax liabilities 500 Decrease in account receivable 2,000 increase inventories 9,000 Decrease in Account Payable 5,000 increase in accrued liabilities 1,000 increase in property and equipment 14,000 increase in short term notes 19,000 decrease in long term bonds 4,000 Use the information above to answer the questions below What is the net cash flow from operating activities What is the net cash flow from investing activities What is the net cash...

Accounts payable $ 40,000 Accounts receivable 33,000 Accumulated depreciation—buildings 25,000 Ac

Accounts payable $ 40,000 Accounts receivable 33,000 Accumulated depreciation—buildings 25,000 Accumulated depreciation—equipment 20,000 Advertising Expense 4,500 Bonds payable, due December 31, 2024 260,000 Buildings 180,000 Capital stock, $1 par value 220,000 Cash 92,120 Commission Expense 8,400 Cost of Goods Sold 31,480 Depreciation Office 2,970 Equipment 75,500 Income Tax Expense 7,150 Income taxes payable 3,860 Insurance Expense Sales Auto 3,200 Interest Expense 1,550 Interest payable...

Increase in accounts payable Increase in accruals Decrease in accounts receivable Increase in Inventory Increase in...

Increase in accounts payable Increase in accruals Decrease in accounts receivable Increase in Inventory Increase in Property, Plant and Equipment Decrease in Long-term Debt Increase in Net Income A. Use of Cash B. Source of Cash

The following information was provided by Paul’s Guitar Shop •Net Income $12,950 •Depreciation Expense $2000 •Increase...

The following information was provided by Paul’s Guitar Shop •Net Income $12,950 •Depreciation Expense $2000 •Increase Accounts receivable $300 •Increase Inventory $3,800 •Increase Prepaid expenses $1,000 •Decrease Accounts payable $9,000 •Increase Accrued expenses and unearned revenues $1,450 •Purchase of property and equipment $101,000 • •Using the indirect method, calculate the net cash provided by operating activities Paul’s Guitar Shop Statement of Cash Flows For year ended December 31, 2019 Cash flows from operating activities $ $ Adjustments to reconcile...

Which one of the following is a source of cash? increase in accounts receivable decrease in...

Which one of the following is a source of cash? increase in accounts receivable decrease in notes payable decrease in common stock decrease in accounts payable increase in inventory all of the above none of the above

cash collections of accounts receivable will increase and decrease _ 1) accounts payable , accounts...

cash collections of accounts receivable will increase ____ and decrease _____ 1) accounts payable , accounts receivable 2) accounts receivable, accounts payable 3) cash, accounts receivable 4) cast, accounts payable when developring cost functions , which of the following is false 1) the cost funtion must be believable 2) the cost function does not have to be reliable 3) personal observations of cost and activities provide the best evidence of a plausible relationship between a cost and its cost driver...

Calculate the net impact on cash given the following information: decrease in accounts receivable= $30; decrease...

Calculate the net impact on cash given the following information: decrease in accounts receivable= $30; decrease in inventory= $45; net fixed asset Disposals= $75; decrease in accounts payable= $27; increase in notes payable= $30; increase in long-term debt= $105; decrease in retained earnings= $18; decrease in common stock= $600. a. $470 net addition to cash b. $120 net deduction from cash c. $360 net addition to cash d. $120 net addition to cash e. $360 net deduction from cash

Question