Question

A) Net income is $50,000. During the year, the company had $20,000 depreciation expense and a gain on sale of assets of $15,027. In addition, accounts receivable increased $7000, supplies decreased $9000 and accounts payable increased $5,000. What is the net cash provided by operations under the indirect method?

B) Net income is $50,000. During the year, accounts payable increased $7,000, inventory decreased $5000, and accounts receivable increased $27,000. What is the net cash provided by operations under the indirect method?

C) Net income is $15,000. During the year, the company had $5,000 depreciation expense and a loss on sale of assets of $14,000. In addition, accounts receivable decreased $20,000 and taxes payable decreased $14,000

Please show work on how to get correct solution. Thank you

Answer 1

a) Calculate following

Net income	50000
Depreciation expense	20000
Gain on sale of assets	-15027
Increase account receivable	-7000
Supplies decreased	9000
Account payable Increase	5000
Net cash provided by operating activities	61973

b) Calculate following

Net income	50000
Increase account payable	7000
Decrease inventory	5000
Account receivable increase	-27000
Net cash provided by operating activities	35000

c) Calculate following

Net income	15000
Depreciation expense	5000
Loss on sale of assets	14000
Decrease account receivable	20000
Decrease taxes payable	-14000
Net cash provided by operating activities	40000