Norbury Corporation's net income last year was $27,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below: Increases (Decreases) Asset and Contra-Asset Accounts: Accounts receivable$14,500 Inventory$ (3,800) Prepaid expenses$10,000 Accumulated depreciation$26,000 Liability Accounts: Accounts payable$14,000 Accrued liabilities$ (8,300) Income taxes payable$2,900 Based solely on this information, the net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be:

Question

Business

Harley Dougherty

1 September, 23:05

Norbury Corporation's net income last year was $27,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below: Increases (Decreases) Asset and Contra-Asset Accounts: Accounts receivable$14,500 Inventory$ (3,800) Prepaid expenses$10,000 Accumulated depreciation$26,000 Liability Accounts: Accounts payable$14,000 Accrued liabilities$ (8,300) Income taxes payable$2,900 Based solely on this information, the net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be:

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Weston · Answer 1

The net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be $60,900

Explanation:

Norbury Corporation's Accumulated depreciation increases of $26,000, therefore, Depreciation expense was $26,000

Under the indirect method, cash flows from operating activities is calculating by using following formula:

Cash flows from operating activities = Net Income + Non-Cash Expenses + Non-Operating Losses - Non-Operating Gains + Decrease in Current Assets - Increase in Current Assets + Increase in Current Liabilities - Decrease in Current Liabilities = $27,000 + $26,000 + $10,000 + $3,800 - $14,500 + $14,000 + $2,900 - $8,300 = $60,900