Royal Corporation uses the indirect method of computing net cash from operating activities and reported the following for 2014: accounts receivable decreased by $10,300, inventory increased by $15,300, accounts payable decreased by $4,000, and income taxes payable increased by $18,800. If Royal Corporation reported profit for 2014 of $157,800 (including $34,800 of depreciation expense), net cash from operating activities for 2014 is:
A) $202,400.
B) $132,800.
C) $164,800.
D) $221,700.

Question

Quizplus · Accepted Answer

Net income + Depreciation expense + Decrease in accounts receivable - Increase in inventory - Decrease in accounts payable + Increase in income taxes payable = Net cash from operating activities$157,800 + $34,800 - $10,300 - $15,300 - $4,000 + $18,800 = $202,400

Royal Corporation Uses the Indirect Method of Computing Net Cash