During the year,Samuels Company reported net income of $300,000,including amortization of intangible assets of $66,000,depreciation of plant assets of $132,000,and amortization of premium on investment in bonds of $20,000.Applying the indirect method,cash provided by operating activities is what amount?
A) $300,000
B) $518,000
C) $478,000
D) $498,000

Question

Quizplus · Accepted Answer

To calculate cash provided by operating activities using the indirect method, start with the net income and adjust for non-cash expenses and changes in working capital. In this case, add back the non-cash expenses: amortization of intangible assets ($66,000), depreciation of plant assets ($132,000), and amortization of premium on bonds ($20,000) to the net income ($300,000). The total is $300,000 + $66,000 + $132,000 + $20,000 = $518,000.

During the Year,Samuels Company Reported Net Income of $300,000,including Amortization