The Baird Company reported depreciation expense of $10,000 and net income of $16,000 on its 2016 income statement.During 2016 the company's accounts receivable balance decreased by $4,000.Based on this information alone,what was the amount of cash flow from operating activities?

Question

Quizplus · Accepted Answer

The amount of cash flow from operating activities can be calculated using the indirect method of the statement of cash flows as follows:
Net income: $16,000
Add back non-cash expenses (depreciation): $10,000
Subtract the decrease in accounts receivable: ($4,000)
Cash flow from operating activities: $22,000
Therefore, the correct option is D, $30,000.

The Baird Company Reported Depreciation Expense of $10,000 and Net