Question

Splish Brothers Inc. reported a net income of $3.3 million in 2017. Depreciation for the year was $161,700, accounts receivable decreased $322,100, and accounts payable decreased $280,800. Compute net cash provided by operating activities using the indirect approach.

Answer 1

Answer:

net flow from operating activity is  = $3503000

Explanation:

given data

net income = $3.3 million

Depreciation = $161,700

accounts receivable = $322,100

accounts payable = $280,800

to find our

net cash provided by operating activities using the indirect approach

solution

cash flow statement as per indirect method is as

particular                                                                                          amount

net income                                                                                       $3300000

adjustment to reconcile net income to

net cash provide operation activity                                               $203000

net flow from operating activity                                                  $3503000

adjustment to reconcile net income  = depreciate expense + accounts receivable - account payable

= $161700 + $32100 - $280800

= $203000

and

net flow from operating activity is = net income + adjustment to reconcile net income to net cash provide operation activity  

net flow from operating activity is  = $3300000 + $203000

net flow from operating activity is  = $3503000