Use the following information and the indirect method to calculate the net cash provided or used by operating activities:
A)$69,900.
B)$108,900.
C)$93,900.
D)$85,700.
E)$81,600.

Question

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: 
A)$69,900. 
B)$108,900. 
C)$93,900. 
D)$85,700. 
E)$81,600.

Quizplus · Accepted Answer

To calculate the net cash provided or used by operating activities using the indirect method, we start with the net income and make adjustments for non-cash expenses and changes in current assets and liabilities:

Net income: $100,000
Adjustments:
Depreciation expense: $25,000
Increase in accounts receivable: ($8,000)
Decrease in inventory: $3,000
Increase in accounts payable: $7,900
Net cash provided by operating activities: $100,000 + $25,000 - $8,000 + $3,000 + $7,900 = $93,900

Therefore, the best choice is C.

Use the Following Information and the Indirect Method to Calculate