Question

Net income for the year was $45,500. Accounts receivable increased $5,500, and accounts payable increased by $11,200. Under the indirect method, the cash flow from operations is a.$62,200 b.$45,500 c.$28,800 d.$51,200

Answer 1

d.$51,200

Step-by-step explanation:

Calculation for the cash flow from operations Under the indirect method

Using this formula

Cash flow=Net income + Increased in accounts payable increased- Increased in Accounts receivable

Let plug in the formula

Cash flow =$45,500+$11,200-$5,500

Cash flow =$51,200

Therefore the cash flow from operations Under the indirect method will be $51,200