Question

S Company reported net income for 2018 in the amount of $470,000. The company's financial statements also included the following:

Increase in accounts receivable	$	77,000
Decrease in inventory		64,000
Increase in accounts payable		230,000
Depreciation expense		104,000
Gain on sale of land		149,000

  
What is net cash provided by operating activities under the indirect method?

Answer 1

Cash from operating activities = $940,000

Working

Statement of Cash Flows (Partial)
Cash flows from operating activities:
Net income	$470,000.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$104,000.00
Gain on sale of land	$149,000.00
Changes in current operating assets and liabilities:
Increase in accounts receivable	$(77,000.00)
Decrease in inventory	$ 64,000.00
Increase in accounts payable	$230,000.00
Net cash flow from operating activities		$ 940,000.00