Question

Bramble Corp. reported net income of $0.85 million in 2022. Depreciation for the year was $136,000, accounts receivable decreased $297,500, and accounts payable decreased $238,000. Compute net cash provided by operating activities using the indirect approach.

Answer 1

$1,045,500

Step-by-step explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $850,000

Adjustment made:

Add : Depreciation expense $136,000

Add: Decrease in accounts receivable $297,500

Less: Decrease in accounts payable -$238,000

Total of Adjustments $195,500

Net Cash flow provided by Operating activities $1,045,500