Mercury Corporation reported the following information on its financial statements: $\begin{array}{lll}
&\underline{ 2014 }&\underline{ 2013 }\
\text { Accountsreceivable } &\$ 150,000 & \$ 120,000 \
\text { Prepaid expenses } &9,000 & 10,000 \
\text { Accounts payable } &65,000 & 80,000 \
\text { Salaries payable } &12,000 & 5,000 \
\text { Net income } &200,000 & \
\text { Depreciation expense } &14,000 & \
\text { Gain on sale of equipment } &6,000 &
\end{array}$
If the company uses the indirect method to prepare the operating activities section of the statement of cash flows,what amount will be reported as net cash inflow from operating activities for 2014?
A)$171,000
B)$215,000
C)$245,000
D)$183,000

Question

Mercury Corporation reported the following information on its financial statements: $\begin{array}{lll}
&\underline{ 2014 }&\underline{ 2013 }\
\text { Accountsreceivable } &\$ 150,000 & \$ 120,000 \
\text { Prepaid expenses } &9,000 & 10,000 \
\text { Accounts payable } &65,000 & 80,000 \
\text { Salaries payable } &12,000 & 5,000 \
\text { Net income } &200,000 & \
\text { Depreciation expense } &14,000 & \
\text { Gain on sale of equipment } &6,000 &
\end{array}$ 
If the company uses the indirect method to prepare the operating activities section of the statement of cash flows,what amount will be reported as net cash inflow from operating activities for 2014?
A)$171,000
B)$215,000
C)$245,000
D)$183,000

Quizplus · Accepted Answer

Net income + Depreciation expense - Gain on sale of equipment + Increase in accounts payable - Decrease in salaries payable + Increase in accounts receivable - Decrease in prepaid expenses = Net cash inflow from operating activities200,000 + 14,000 - 6,000 + 15,000 - 7,000 + 30,000 - 1,000 = 171,000

Mercury Corporation Reported the Following Information on Its Financial Statements