Question

Pizza International, Inc. operates 700 family restaurants around the world. The company’s annual report contained the following information (in thousands): Operating Activities Net Loss $ (9,473) Depreciation 33,350 Increase in Receivables 179 Decrease in Inventory 661 Increase in Prepaid Expenses 673 Decrease in Accounts Payable 2,291 Decrease in Accrued Liabilities 728 Increase in Income Taxes Payable 1,879 Payments on Notes Payable 12,700 Cash Paid for Equipment 29,082 Required: 1. Based on this information, compute cash flow from operating activities using the indirect method

Answer 1

Answer:

$22,546

Explanation:

The preparation of the Cash Flows from Operating Activities -Indirect Method is shown below:

Cash flow from Operating activities

Net loss  -$9,473

Add: depreciation $33,350

Less: Increase in Receivables -$179

Add: Decrease in Inventory $661

Less: Increase in Prepaid Expenses -$673

Less: Decrease in Accounts Payable -$2,291

Less: Decrease in Accrued Liabilities -$728

Add: Increase in Income Taxes Payable $1,879

Net Cash flow from Operating activities $22,546

Note payable is considered long term liabilities. Hence, we ignored it

The positive sign shows the inflow of cash while the negative sign shows the outflow of cash and the same is shown above