Question

The following information is available for Cornelius Inc.: Selected Income Statement Information Amount Net income $52,000 Depreciation expense 11,300 Selected Balance Sheet Information Beginning Balance Ending Balance Accounts receivable $11,500 $17,650 Inventory 33,800 27,825 Accounts payable 15,900 24,600 Required: Prepare the net cash flows from operating activities using the indirect method. Use a minus sign to indicate any decreases in cash or cash flows. Cornelius Inc. Net Cash Flows from Operating Activities Using Indirect Method

Answer 1

Answer:

Net Cash Flows from Operating Activities Using Indirect Method is $71,825

Explanation:

In Cornelius Inc.:

Increase in Accounts receivable = $17,650 - $11,500 = $6,150

Decrease in Inventory = $27,825 - $33,800 = -$5,975

Increase in Accounts payable = $24,600 - $15,900 = $8,700

Cornelius Inc. uses the indirect method.

Net Cash Flows from Operating Activities = Net Income + Depreciation expense - Increase in Accounts receivable + Decrease in Inventory + Increase in Accounts payable = $52,000 + $11,300 - $6,150 + $5,975 + $8,700 = $71,825