Question

Norbury Corporation's net income last year was $33,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below:

	Increases (Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable	$	16,500
Inventory	$	(4,200	)
Prepaid expenses	$	12,000
Accumulated depreciation	$	30,000
Liability Accounts:
Accounts payable	$	16,000
Accrued liabilities	$	(8,700	)
Income taxes payable	$	3,300

Based solely on this information, the net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be:

A) $73,600

B) $16,700

C) $49,300

D) $97,900

Answer 1

Cash from operating activities will be as follows:

Net income	33,000
Add: Increase in Depreciation (Non-cash)	30,000
Increase in Accounts receivables (cash block)	(16,500)
Decrease in Inventory (cash released)	4,200
Increase in Prepaid Expenses (cash block)	(12,000)
Increase in Accounts payables (cash not paid)	16,000
Decrease in Accrued Liabilities (cash paid)	(8,700)
Increase in income taxes payable (cash not paid)	3,300
Cash Flow from operating activities	$49,300

Hence, answer is c