Using the indirect method for preparing the statement of cash flows,what is the net cash flow from operating activities if net income is $39,000;depreciation expense is $9,000;and the decrease in accounts payable is $5,000.

Question

Quizplus · Accepted Answer

The net cash flow from operating activities is calculated by adjusting the net income for non-cash expenses and changes in working capital. Start with the net income of $39,000, add back the non-cash depreciation expense of $9,000, and subtract the decrease in accounts payable of $5,000. This results in a net cash flow from operating activities of $43,000.

Using the Indirect Method for Preparing the Statement of Cash