Dennis Corporation prepared the following data (in dollars) for the current year: Using the indirect method, what is the net cash flow from operating activities?
$\begin{array}{|l|r|}
\hline \text {Increase in accounts receivable }&\$6,000\
\hline \text { Decrease in inventory } & 2,400 \
\hline \text { Increase in prepaid expenses } & 1,600 \
\hline \text { Depreciation expense, equipment } & 7,000 \
\hline \text { Loss on sale of equipment } & 1,500 \
\hline \text { Net income } & 130,000 \
\hline
\end{array}$
A)$146,800
B)$133,300
C)$101,200
D)$118,000

Question

Quizplus · Accepted Answer

To calculate the net cash flow from operating activities using the indirect method, start with net income and adjust for changes in working capital and non-cash expenses:  Net income: $130,000  Add back non-cash expenses:  - Depreciation expense: $7,000  - Loss on sale of equipment: $1,500  Adjust for changes in working capital:  - Increase in accounts receivable: -$6,000  - Decrease in inventory: +$2,400  - Increase in prepaid expenses: -$1,600  Net cash flow from operating activities = $130,000 + $7,000 + $1,500 - $6,000 + $2,400 - $1,600 = $133,300.

Dennis Corporation Prepared the Following Data (In Dollars) for the Current