Question

Vaughn Manufacturing reported net income of $1.5 million in 2017. Depreciation for the year was $153,000, accounts receivable decreased $343,900, and accounts payable decreased $282,900. Compute net cash provided by operating activities using the indirect approach. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Answer:

The answer is $1,714,000

Explanation:

This is an indirect method of preparing operating activities under cash flow.

Net income $1,500,000

Add back:

Depreciation. $153,000

Changes in working capital:

Add: Decrease in accounts receivables $343,900.

Subtract: Decrease in accounts payable. ($282,900)

Net cash from operating activities:

$1,714,000