Question

S Company reported net income for 2013 in the amount of $400,000. The company's financial statements also included the following:Inc in A/R: $80,000Dec in Inventory: $60,000Inc in A/P: $200,000Dep Exp: $104,000Gain on Sale of Land: $148,000What is net cash provided by operating activities under the indirect method?a) $536,000b) $832,000c) $432,000d) $580,000

Answer 1

Answer:

Net cash Provided by Operating activities = $416000

Explanation:

Using indirect method for Cash flow from operating activities we use following steps to get value of net cash provided by operating activities.

Net income                                                                     $400000

Add: Depreciation                                                           $104000

Less: Gain on Sale of Land                                             -$148000

Less: Increase in Accounts Receivable                          -$80000

Less: Increase in Inventory                                              -$60000

Add: Increase in Accounts Payable                                $200000

Net Cash Provided by operating activities                     $416000