The Vintage Boutique had net income of $50,000.Accounts Receivable increased by $30,000;inventory decreased by $20,000;amounts payable increased by $4,000 and salaries payable decreased by $1,000.The amount of cash flow from continuing operating activities under the indirect method is:

Question

Quizplus · Accepted Answer

Net income: $50,000
Add back depreciation and amortization (not given in the question): -
Changes in working capital:
Increase in accounts receivable: $30,000
Decrease in inventory: ($20,000)
Increase in amounts payable: $4,000
Decrease in salaries payable: ($1,000)
Cash flow from operating activities: $50,000 + $30,000 - $20,000 + $4,000 - $1,000 = $43,000. Therefore, the correct answer is B.

The Vintage Boutique Had Net Income of $50,000