Galaxy Corporation reported net income of $75,000 for the year.During the year, accounts receivable increased by $6,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded.Using the indirect method, cash provided by operating activities for the year is

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The cash provided by operating activities is calculated by adjusting net income for changes in working capital and non-cash expenses. Start with net income of $75,000, add back depreciation of $5,000 (a non-cash expense), subtract the increase in accounts receivable of $6,000 (as it represents cash not received), and subtract the decrease in accounts payable of $3,000 (as it represents cash paid out). This results in $75,000 + $5,000 - $6,000 - $3,000 = $71,000.

Galaxy Corporation Reported Net Income of $75,000 for the Year