Question

Creble Company reported net income for 2016 in the amount of $40,000. The company's financial statements also included the following: Increase in accounts receivable $4,000
Decrease in inventory 2,000

Depreciation expense 3,000

Gain on sale of equipment 5,000

In the statement of cash flows what is net cash provided by operating activities under the indirect method?

$36,000.

$41,000.

$40,000.

$38,000.

Answer 1

Answer:

$36,000

Explanation:

Net Cash = Net Income for 2016 - Accounts Receivable + Decrease in inventory + Depreciation expense - Gain on sale of equipment

=> Net Cash = $40,000 - $ 4,000 + $2,000 + $3,000 - $5,000

=> Net Cash = $36,000