The net profit reported on the income statement for the current year was $50 000.Depreciation on property,plant and equipment was $31 000.What is the amount of cash flows from operating activities that would appear on the statement of cash flows prepared using the indirect method?
A) $19 000
B) $49 000
C) $81 000
D) $80 000

Question

Quizplus · Accepted Answer

When using the indirect method to prepare the statement of cash flows, depreciation expense is added back to net income because it is a non-cash expense. Therefore, the cash flows from operating activities would be $50,000 (net income) + $31,000 (depreciation) = $81,000.

The Net Profit Reported on the Income Statement for the Current