Question

Anew Health Care Company reports net income of $ 220 comma 000 and Depreciation Expense of $ 15 comma 000 for the year ending December​ 31, 2019. No longminusterm assets were sold or exchanged during 2019. They also have the following data​ available: December​ 31, 2019 December​ 31, 2018 Current​ Assets: Cash $ 30 comma 000 $ 76 comma 000 Accounts Receivable $ 157 comma 000 104 comma 000 Inventory $ 103 comma 000 68 comma 000 Total Current Assets $ 290 comma 000 $ 248 comma 000 Current​ Liabilities: Accounts Payable $ 51 comma 000 $ 39 comma 000 Salaries Payable 43 comma 000 89 comma 000 Total Current Liabilities $ 94 comma 000 $ 128 comma 000 Using the indirect​ method, what is the net cash provided by operating activities for the year ending December​ 31, 2019

Answer 1

Answer:

$113,000

Explanation:

Cash flow from operating activities:

= Net Income + Depreciation

= $220,000 + $15,000

= $235,000

Change in operating assets & liabilities:

Increase in accounts receivable = $53,000

Increase in inventory = $35,000

Increase in accounts payable = $12,000

Decrease in salaries payable = $46,000

Therefore,

Net cash flow from operating activities:

= Cash flow from operating activities - Increase in accounts receivable - Increase in inventory + Increase in accounts payable - Decrease in salaries payable

= $235,000 - $53,000 - $35,000 + $12,000 - $46,000

= $113,000