Question

The following information is available from the current period financial statements:

Answer 1

Answer:

The correct answer is option (a).

Explanation:

According to the scenario, the computation for given data are as follows:

Net cash flow = Net income + Depreciation expense - Increase in accounts receivable - Decrease in accounts payable

Net cash flow = $165,000 + $28,000 - $16,000 - $21,000

= $193,000 - $37,000

= $156,000

Hence, the net cash flow from operating activities using the indirect method is  $156,000.