A company has a net income of $70,000 and depreciation expenses of $20,000.During the year,its accounts payable balance decreased by $15,000.What is the net cash flow from operating activities using the indirect method for preparing the statement of cash flows?

Question

Quizplus · Accepted Answer

Net cash flow from operating activities using the Indirect Method can be calculated as follows:

Net Income ............................ $70,000
Add: Depreciation Expense ....... $20,000
Decrease in Accounts Payable .. $15,000

Net cash flow from operating activities = $70,000 + $20,000 + $15,000 = $75,000

Therefore, the best answer is (D) $75,000.

A Company Has a Net Income of $70,000 and Depreciation