The data given below are from the accounting records of the Kuhn Corporation: Based on this information, the net cash provided by (used in) operating activities using the indirect method would be:
A) $70,000
B) $73,500
C) $64,000
D) $79,000

Question

The data given below are from the accounting records of the Kuhn Corporation:  Based on this information, the net cash provided by (used in) operating activities using the indirect method would be:
A) $70,000 
B) $73,500 
C) $64,000 
D) $79,000

Quizplus · Accepted Answer

To calculate the net cash provided by operating activities using the indirect method, we start with net income of $80,000 and adjust for non-cash items such as depreciation expense of $25,000, increase in accounts receivable of $12,000, and decrease in accounts payable of $9,000. Therefore, the net cash provided by operating activities is:
Net income + Depreciation expense - Increase in accounts receivable + Decrease in accounts payable 
= $80,000 + $25,000 - $12,000 - $9,000 
= $64,000. 
Therefore, the correct answer is C, $64,000.

The Data Given Below Are from the Accounting Records of the Kuhn