S Company reported net income for 2018 in the amount of $400,000. The company's financial statements also included the following: Increase in accounts receivable $ 80,000 Decrease in inventory 60,000 Increase in accounts payable 200,000 Depreciation expense 104,000 Gain on sale of land 148,000 What is net cash provided by operating activities under the indirect method?

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Business

25 December, 08:51

S Company reported net income for 2018 in the amount of $400,000. The company's financial statements also included the following: Increase in accounts receivable $ 80,000 Decrease in inventory 60,000 Increase in accounts payable 200,000 Depreciation expense 104,000 Gain on sale of land 148,000 What is net cash provided by operating activities under the indirect method?

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Taniyah Dickson · Answer 1

Net cash provided by operating activities under the indirect method

Cashflow From Operating Activities

Net Income 400,000

Adjastments for Non-Cash Items

Depreciation 104,000

Adjastments of Other Items Included in Cashflow Statement

Gain on Sale of Land (148,000)

Working Capital Adjastments

Increases in Accounts Receivables (80,000)

Decreases in Inventory 60,000

Increases in Accounts Payable 200,000

Net Cashflow From Operating Activities 536,000

Explanation:

Indirect Method Adjasts the Profit for the year with three things

Non-Cash Items Items included in Cashflow Statement Working Capital

To arrive at Net Cashflow from Operating Activities