Question

The net income reported on the income statement for the current year was $275,000. Depreciation recorded...

The net income reported on the income statement for the current year was $275,000. Depreciation recorded on fixed assets was $40,000. Balances of accounts receivable and accounts payable at the end and at the beginning of the year are as follows:

End

Beginning

Accounts receivable

112,000

108,000

Accounts payable

75,000

89,000

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

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Answer #1
Cash flow from operating activities:
(Indirect Method)
Net Income $       2,75,000
Reconcile net income to net cash flow from operating actiivties:
Depreciation               40,000
Increase of accounts receivable -4,000
Decrease of accounts payable             -14,000
Net Cash provided by operating activities           2,97,000
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