Net income reported on the income statement for the current year was $350,000.Depreciation recorded on plant assets was $26,000.Accounts receivable and inventories increased by $3,000 and $5,000 respectively.Prepaid expenses and accounts payable decreased by $2,500 and $13,000 respectively.Using the indirect method, how much would be reported as net cash flow from operating activities on the statement of cash flows?
A) $120,000
B) $234,000
C) $357,500
D) $300,000

Question

Quizplus · Accepted Answer

Net cash flow from operating activities = Net income + Depreciation expense - Increase in accounts receivable - Increase in inventories + Prepaid expenses
= $350,000 + $26,000 - $3,000 - $5,000 + $2,500 - $13,000
= $357,500

Net Income Reported on the Income Statement for the Current