Question

Panda Cafe earned net income of $ 69 comma 000 after deducting depreciation of $ 3 comma 000 and all other expenses. Current assets decreased by $ 2 comma 000​, and current liabilities increased by $ 8 comma 000. How much was Panda Cafe's cash provided by operating activities​ (indirect method)?

Answer 1

Panda Cafe's cash provided by operating activities​ is 82.000

Step-by-step explanation:

The indirect method involves the adjustment of net income with changes in balance sheet accounts to arrive at the amount of cash generated by operating activities.

It depends on the account if it is added or subtracted to net income. In this case , all of them are added to the net income.

Net income 69.000

Adjustment to reconcile the net income to cash

+ Depreciation expense 3.000

+ Increase in current liabilities 8.000

+ Current assets decreased 2.000

Net cash 82.000