Question

Fine Furniture Company had a net income of $50,000. Accounts receivable increased by $30,000; inventory decreased by $20,000; accounts payable increased by $4,000; and salaries payable decreased by $1,000. The amount of cash flow from continuing operating activities under the indirect method is?

Answer 1

The amount of cash flow from continuing operating activities under the indirect method is $43,000.

Explanation:

Fine Furniture Company had a net income of $50,000.

Accounts receivable increased by $30,000.

The inventory decreased by $20,000.

The accounts payable increased by $4,000.

Salaries payable decreased by $1,000.

The amount of cash flow from continuing operating activities under the indirect method is:

`(50000-30000+20000+4000-1000)=$43000`