Scranton, Inc. reports net income of $232,000 for the year ended December 31. It also reports $88,600 depreciation expense and a $5,100 gain on the sale of equipment. Its comparative balance sheet reveals a $35,900 decrease in accounts receivable, a $15,950 increase in accounts payable, and a $12,650 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.

Question

Zara Parker

Business

1 December, 01:16

Scranton, Inc. reports net income of $232,000 for the year ended December 31. It also reports $88,600 depreciation expense and a $5,100 gain on the sale of equipment. Its comparative balance sheet reveals a $35,900 decrease in accounts receivable, a $15,950 increase in accounts payable, and a $12,650 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.

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Grant Walker · Answer 1

Cash flow form operating activities $359,800

Explanation:

$

Net income 232,000

Add depreciation expense 88,600

Add Decrease in receivable 35,900

Increase in account payable 15,950

Decrease in wages (12,650)

Cash flow form operating activities 359,800

Increase in payable and decrease in receivable represent cash inflow while decrease in payable and increase in receivables represent cash outflow