Question

Indigo Corporation reported net income of $49,900 in 2020. Depreciation expense was $17,800. The following working capital accounts changed.

Accounts receivable $10,400 increase
Available-for-sale debt securities 15,800increase
Inventory 7,100 increase
Nontrade note payable 15,600 decrease
Accounts payable 11,900 increase

Compute net cash provided by operating activities. (Show amounts that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis eg. (15,000).)

Answer 1

To compute net cash provided by operating activities, you need to consider the changes in working capital accounts. The formula to calculate net cash provided by operating activities.

Step-by-step explanation:

To compute net cash provided by operating activities, we need to consider the changes in working capital accounts. The formula to calculate net cash provided by operating activities is:

Net Cash Provided by Operating Activities = Net Income + Depreciation Expense - Increase in Accounts Receivable - Increase in Available-for-sale Debt Securities - Increase in Inventory + Decrease in Nontrade Note Payable + Increase in Accounts Payable

Plugging in the given values:

Net Cash Provided by Operating Activities = $49,900 + $17,800 - $10,400 - $15,800 - $7,100 + $15,600 + $11,900 = $62,000