Green Corporation reported net earnings of $50,000 for the year. During the year, trade receivables increased by $8,000, trade payables decreased by $4,000 and depreciation expense of $6,000 was recorded. Net cash provided by operating activities for the year, using the indirect method, is
A) $54,000.
B) $50,000.
C) $44,000.
D) $56,000.

Question

Quizplus · Accepted Answer

Net earnings of $50,000 
Add: Depreciation expense $6,000 
Increase in trade receivables ($8,000) is deducted as it represents cash not received 
Decrease in trade payables ($4,000) is added as it represents cash paid 
Net cash provided by operating activities = $50,000 + $6,000 - $8,000 + $4,000 
= $52,000 - $8,000 
= $44,000.

Green Corporation Reported Net Earnings of $50,000 for the Year