A company has a net income of $39,000 and depreciation expenses of $9,000. During the year, its accounts payable balance decreased by $5,000. What is the net cash flow from operating activities using the indirect method for preparing the statement of cash flows?

Question

Quizplus · Accepted Answer

To calculate net cash flow from operating activities using the indirect method, we start with net income and add non-cash expenses such as depreciation. We then adjust for changes in current assets and liabilities.

Net Income: $39,000 
Add: Depreciation Expenses: $9,000

Adjusted Net Income: $48,000

Decrease in Accounts Payable: $5,000

Net Cash Flow from Operating Activities: $48,000 - $5,000 = $43,000

Therefore, the answer is (D) $43,000.

A Company Has a Net Income of $39,000 and Depreciation