The estimated amount of cash provided by operating activities for Oriole Company for the year ended December 31, 2023, using the indirect method is $150,000.
To estimate the cash provided by operating activities using the indirect method, adjustments to net income are made for non-cash expenses and changes in working capital. Given a net income of $120,000, a depreciation expense of $35,000 (a non-cash expense), an increase in accounts receivable by $5,000, and a decrease in accounts payable by $10,000, the calculation is as follows:
Cash Provided by Operating Activities = Net Income + Non-Cash Expenses + Increases in Liabilities - Decreases in Assets
Substituting the values:
Cash Provided by Operating Activities = $120,000 + $35,000 + $5,000 - $10,000
Therefore, the estimated amount of cash provided by operating activities for Oriole Company for the year ended December 31, 2023, using the indirect method, is $150,000.
Complete question:
Assuming Oriole Company had a net income of $120,000 and depreciation expense of $35,000 for the year ended December 31, 2023, and its accounts payable decreased by $10,000 while accounts receivable increased by $5,000, what would be the estimated amount of cash provided by operating activities using the indirect method?