Question

The net income reported on the income statement for the current year was $225000. Depreciation recorded on plant assets was $34600. Accounts receivable and inventories increased by $2100 and $8200, respectively. Prepaid expenses and accounts payable decreased by $2100 and $11500 respectively. How much cash was provided by operating activities? $259600 $225000 $205300 $239900

Answer 1

$239,900

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 $225,000

Adjustment made:

Add : Depreciation expense $34,600

Less: Increase in accounts receivable -$2,100

Less: Increase in inventory -$8,200

Less: Decrease in accounts payable -$11,500

Add: Decrease in prepaid expenses $2,100

Total of Adjustments $14,900

Net Cash flow from Operating activities $239,900