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15 February, 05:08

S Company reported net income for 2018 in the amount of $400,000. The company's financial statements also included the following: Increase in accounts receivable $ 80,000 Decrease in inventory 60,000 Increase in accounts payable 200,000 Depreciation expense 104,000 Gain on sale of land 148,000 What is net cash provided by operating activities under the indirect method?

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  1. 15 February, 08:57
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    Net cash provided by operating activities under the indirect method

    Cashflow From Operating Activities

    Net Income 400,000

    Adjastments for Non-Cash Items

    Depreciation 104,000

    Adjastments of Other Items Included in Cashflow Statement

    Gain on Sale of Land (148,000)

    Working Capital Adjastments

    Increases in Accounts Receivables (80,000)

    Decreases in Inventory 60,000

    Increases in Accounts Payable 200,000

    Net Cashflow From Operating Activities 536,000

    Explanation:

    Indirect Method Adjasts the Profit for the year with three things

    Non-Cash Items Items included in Cashflow Statement Working Capital

    To arrive at Net Cashflow from Operating Activities
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