Compute the cash flows from operations using the indirect method if Star Corporation had $250,000 in net income, $30,000 in depreciation expense, a decrease of $20,000 in accounts receivable and an increase in bonds payable of $50,000.
A) $370,000
B) $300,000
C) $250,000
D) $310,000

Question

Quizplus · Accepted Answer

Cash flow from operations = Net income + Depreciation + Decrease in A/R = $250,000 + $30,000 + $20,000 = $300,000.

Compute the Cash Flows from Operations Using the Indirect Method