Nieto Company reported net income of $22,000 for the current year. During the year, Inventory decreased by $7,000, Accounts Payable decreased by $8,000, Accounts Receivable increased by $6,000, and Depreciation Expense was $10,000. If the indirect method is used, what is the net cash provided by operating activities?

Question

River

Business

21 December, 23:33

Nieto Company reported net income of $22,000 for the current year. During the year, Inventory decreased by $7,000, Accounts Payable decreased by $8,000, Accounts Receivable increased by $6,000, and Depreciation Expense was $10,000. If the indirect method is used, what is the net cash provided by operating activities?

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Sterling · Answer 1

net cash provided by operating activities = $11,000

Explanation:

given data

net income = $22,000

Inventory decreased = $7,000

Payable decreased = $8,000

Accounts Receivable increased = $6,000

Depreciation Expense = $10,000

solution

we get here net cash provided by operating activities that is express as

net cash provided = Net income - Decrease in Inventory - Decrease in Accounts Payable + Depreciation - Increase in Accounts Receivable ... 1

put here value and we get

net cash provided = $22,000 - $7,000 - $8,000 + $10,000 - $6,000

net cash provided by operating activities = $11,000