Question

Chino Company reported net income of $23,000 for the current year. During the year, Inventory decreased by $7,500, Accounts Payable decreased by $8,250, Depreciation Expense was $10,500, and Accounts Receivable increased by $7,000. If the indirect method is used, what is the net cash provided by operating activities?

A). $25,750.
B). $56,250.
C). $42,250.
D). $11,000.

Answer 1

Step-by-step explanation:

A). $25,750.

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Answer 2

Answer: A). $25,750.

Step-by-step explanation:

Cash from operating activities refers to cash from the business operations of the company.

Formula is:

= Net Income + Depreciation + Decrease in inventory - Accounts payable decrease - Accounts receivable increase

= 23,000 + 10,500 + 7,500 - 8,250 - 7,000

= $25,750