Mason Corporation reported a net loss of $12,000 for the year ended December 31, 2013. During the year, accounts receivable decreased $5,000, merchandise inventory increased $4,000, accounts payable increased by $13,000, and depreciation expense of $7,000 was recorded. During 2013, operating activities using the indirect method
A) provided net cash of $9,000.
B) used net cash of $23,000.
C) used net cash of $33,000.
D) provided net cash of $7,000.

Question

Quizplus · Accepted Answer

The net loss of $12,000 is adjusted for changes in working capital and non-cash expenses: +$5,000 (decrease in accounts receivable), -$4,000 (increase in inventory), +$13,000 (increase in accounts payable), and +$7,000 (depreciation). The net cash provided by operating activities is $9,000.

Mason Corporation Reported a Net Loss of $12,000 for the Year