Question

In preparing a company's statement of cash flows using the indirect method, the following information is available: net income $ 69,000 accounts payable increased by 19,700 accounts receivable decreased by 26,700 inventories increased by 8,400 depreciation expense 35,100 net cash provided by operating activities was ________.

Answer 1

The net cash provided by operating activities is $84,100.

Step-by-step explanation:

The net cash provided by operating activities can be calculated using the indirect method of preparing the statement of cash flows. In this method, we start with the net income and make adjustments for non-cash items and changes in working capital.

To calculate the net cash provided by operating activities, we start with the net income of $69,000. We then add back the non-cash depreciation expense of $35,100. Next, we adjust for the changes in working capital. Accounts payable increased by $19,700, so we subtract this amount. Accounts receivable decreased by $26,700, so we add this amount. Inventories increased by $8,400, so we subtract this amount. Adding up all these amounts, the net cash provided by operating activities is $84,100.