Question

Scranton, Inc. reports net income of $232,000 for the year ended December 31. It also reports $88,600 depreciation expense and a $5,100 gain on the sale of equipment. Its comparative balance sheet reveals a $35,900 decrease in accounts receivable, a $15,950 increase in accounts payable, and a $12,650 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.

Answer 1

Cash flow form operating activities $359,800

Step-by-step explanation:

$

Net income 232,000

Add depreciation expense 88,600

Add Decrease in receivable 35,900

Increase in account payable 15,950

Decrease in wages ( 12,650)

Cash flow form operating activities 359,800

Increase in payable and decrease in receivable represent cash inflow while decrease in payable and increase in receivables represent cash outflow