Question

The comparative balance sheets for Pina Colada Corp. show these changes in noncash current asset accounts: accounts receivable decreased $78,500, prepaid expenses increased $28,200, and inventories increased $41,700. Compute net cash provided by operating activities using the indirect method, assuming that net income is $226,500.

Answer 1

Cash Flow from Operating Activities

Net Income $226,500

Decrease in Accounts Receivable $78,500

Increase in Prepaid Expenses -$28,200

Increase in Inventories -$41,700

Cash Provided by Operating Activities $235,100