Final answer:
The calculation of cash flow from operations should be decreased by $15,000 due to a $10,000 increase in accounts receivable and a $5,000 decrease in accounts payable, as adjustments in the indirect method of cash flow calculation.
Step-by-step explanation:
When calculating cash flow from operating activities using the indirect method, changes in working capital accounts like accounts receivable and accounts payable are adjusted from net income to arrive at cash flow from operations.
An increase in accounts receivable indicates that the company sold goods on credit, which does not correspond to actual cash received, and thus this increase is subtracted from net income. Conversely, a decrease in accounts payable suggests that the company has paid off some of its creditors, which is an actual cash outflow and should be subtracted as well.
In the scenario where the company's accounts receivable increased by $10,000 and its accounts payable decreased by $5,000, the cash flow from operations should be decreased by the sum of these two amounts. The increase in accounts receivable would decrease cash flow by $10,000, and the decrease in accounts payable would further decrease cash flow by $5,000, leading to a total decrease of $15,000 to the cash flow from operations. Therefore, the correct answer is b. decreased by $15,000.