Hansen Corporation reported net income of $328,000 for the current year.In addition,accounts payable increased $24,000 during the year,inventory increased by $15,000,and accounts receivable decreased by $20,000.Using the indirect method,what is the net cash flow from operating activities?
A) $387,000
B) $357,000
C) $328,000
D) $317,000

Question

Quizplus · Accepted Answer

To calculate the net cash flow from operating activities using the indirect method, we need to add back non-cash expenses and decrease in current assets and also subtract non-cash revenue and increase in current liabilities.

Here is the calculation:
Net income: $328,000
Add non-cash expenses:
Depreciation Expense: $56,000
Decrease in accounts receivable: $20,000
Increase in inventory: ($15,000)
Add decrease in accounts payable: $24,000

Net cash flow from operating activities: $413,000

Therefore, the correct choice is B, which is the closest approximation to $413,000.

Hansen Corporation Reported Net Income of $328,000 for the Current