Collins Corporation reported net income of $45,000; depreciation expenses of $20,000; a decrease in Accounts Payable of $2,000; and an increase in Accounts Receivable of $4,000. Net cash flow from operating activities using the indirect method is:

Question

Quizplus · Accepted Answer

Net cash flow from operating activities using the indirect method starts with net income and adjusts for non-cash expenses and changes in working capital. Here, start with net income ($45,000), add back depreciation expenses ($20,000), subtract the decrease in Accounts Payable ($2,000), and subtract the increase in Accounts Receivable ($4,000). The calculation is $45,000 + $20,000 - $2,000 - $4,000 = $59,000.

Collins Corporation Reported Net Income of $45,000; Depreciation Expenses of $20,000;