Question

Hilton company reported net income of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Using the indirect method, net cash provided by operating activities for the year is:_______

a. $25,000.
b. $45,000.
c. $29,000.
d. $30,000.

Answer 1

a. $25,000

Explanation:

The computation of net cash provided by operating activities is shown below:-

Particulars Amount

Net Income $30,000

Add Depreciation $5,000

Less Increase in Accounts Receivables -$7,000

Less Decrease in Accounts Payable -$3,000

Net cash Provided by Operating Activities $25,000