Question

In preparing a company's statement of cash flows for the most recent year on the indirect method, the following information is available:

Net income for the year was $ 58,500
Accounts payable decreased by 24,500
Accounts receivable decreased by 31,500
Inventories increased by 11,500
Cash dividends paid were 15,300
Depreciation expense was 33,500

Net cash provided by operating activities was:

A) $33,500

B) $87,500

C) $130,500

D) $72,800

E) $47,500

Answer 1

Answer:

Net cash provided by operating activities was: $ 72,200 (None of the Above Options)

Explanation:

Cash flow from Operating Activities is a section in the Statement of Cashflow that reconcils the Net Income to net cashflow after adjastments in (1) Non Cash Items (2) Items Included Elsewhere in Cashflow Statement (3) Working Capital Movements.

Cashflow From Operating Activities

Net income for the year was                                                            58,500

(1) Adjastments for Non Cash Items

Depreciation expense was                                                               33,500

(2)Adjastments for Items Included Elsewhere  

Cash dividends paid were                                                               (15,300)

(3)Adjastments for Working Capital Movements

Accounts payable decreased by                                                    (24,500)

Accounts receivable decreased by                                                  31,500

Inventories increased by                                                                   (11,500)

Net Cash from Operating Activities                                                  72,200