Final answer:
To calculate the net cash provided by operating activities for the Bein Company using the indirect method, subtract the increase in accounts receivable and the decrease in accounts payable from the net income. The calculation shows that the net cash provided by operating activities is $20,000.
Step-by-step explanation:
To calculate the net cash provided by operating activities using the indirect method, start with the company's net income and adjust it for changes in working capital accounts. In the case of the Bein Company, the net income is $65,000. However, during the period, if accounts receivable increased by $35,000, this represents income that has been earned but not received in cash, so it must be subtracted from the net income. Conversely, if accounts payable decreased by $10,000, it means that the company has paid out more cash than is reflected in the net income; hence, this amount must also be subtracted from the net income.
Therefore, the calculation for the net cash provided by operating activities would be:
Net income: $65,000
Minus increase in accounts receivable: ($35,000)
Minus decrease in accounts payable: ($10,000)
Net cash provided by operating activities: $20,000