S Company reported net income for 2013 in the amount of $400,000. The company's financial statements also included the following: What is net cash provided by operating activities under the indirect method?
A)$432,000.
B)$536,000.
C)$580,000.
D)$832,000.

Question

S Company reported net income for 2013 in the amount of $400,000. The company's financial statements also included the following:  What is net cash provided by operating activities under the indirect method?
A)$432,000. 
B)$536,000. 
C)$580,000. 
D)$832,000.

Quizplus · Accepted Answer

To calculate net cash provided by operating activities using the indirect method, start with net income and adjust for non-cash items and changes in current assets and liabilities. Beginning with net income of $400,000, add back depreciation of $180,000, subtract the increase in accounts receivable of $140,000, and add the decrease in accounts payable of $4,000. This results in net cash provided by operating activities of $536,000.

S Company Reported Net Income for 2013 in the Amount