Question

Statement of Income Additional Data Sales $800,000 Decrease in accounts payable $30,000 Cost of sales 400,000...

Statement of Income Additional Data
Sales $800,000 Decrease in accounts payable $30,000
Cost of sales 400,000 Proceeds from the sale of land 40,000
Gross profit 400,000 Increase in inventory 40,000
Cash operating expenses 100,000 Decrease in accounts receivable 5,000
Depreciation 40,000
Loss on sale of land 20,000
Net income $240,000


Using the indirect method, the net cash flow from operating activities was

A

$365,000.

B

$300,000.

C

$235,000.

D

$240,000.

Homework Answers

Answer #1

Solution:

Statement of Cash Flows (Partial)
Particulars Details Amount
Cash Flow from Operating Activities:
Net Income $240,000.00
Adjustments to reconcile net income to net cash provided by operations:
Depreciation Expense $40,000.00
Loss on sale of Land $20,000.00
Decrease in accounts receivables $5,000.00
Increase in inventory -$40,000.00
Decrease in accounts payable -$30,000.00 -$5,000.00
Net Cash provided by operating activities $235,000.00

Hence option C is correct.

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