Collins Corporation reported net income of $35,000; depreciation expenses of $20,000; an increase in Accounts Payable of $2,000; and an increase in Accounts Receivable of $3,000.Net cash flow from operating activities using the indirect method is:

Question

Quizplus · Accepted Answer

To calculate the net cash flow from operating activities using the indirect method, we need to adjust net income by adding back non-cash expenses such as depreciation and adjusting for changes in current assets and liabilities. Therefore:
Net cash flow from operating activities = Net income + Depreciation expenses - Increase in Accounts Payable + Increase in Accounts Receivable
= $35,000 + $20,000 - $2,000 + $3,000
= $54,000. 
Therefore, the correct answer is option B.

Collins Corporation Reported Net Income of $35,000; Depreciation Expenses of $20,000;