Operating Activities: Indirect Method Video Lessons

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Problem: Given the following information and using the indirect method, calculate the cash flows from operating activities.                                                             End of Year                             Beginning of Year Cash                                                      $ 38,500                                     $ 44,200 Accounts receivable (net)                         79,200                                        68,800 Inventories                                                90,700                                        81,100 Prepaid expenses                                       4,500                                          6,500 Accounts payable                                     65,000                                         72,800 Salaries Payable                                        5,900                                           5,400 Net Income reported on the Income Statement for the current year was $115,000, which included a loss on sale of land of $8,000. Depreciation recorded on office equipment for the year amounted to $48,000. a) $129,700 b) $137,700 c) $144,700 d) $145,700

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Problem Details

Given the following information and using the indirect method, calculate the cash flows from operating activities.

                                                            End of Year                             Beginning of Year
Cash                                                      $ 38,500                                     $ 44,200
Accounts receivable (net)                         79,200                                        68,800
Inventories                                                90,700                                        81,100
Prepaid expenses                                       4,500                                          6,500
Accounts payable                                     65,000                                         72,800
Salaries Payable                                        5,900                                           5,400

Net Income reported on the Income Statement for the current year was $115,000, which included a loss on sale of land of $8,000. Depreciation recorded on office equipment for the year amounted to $48,000.

a) $129,700

b) $137,700

c) $144,700

d) $145,700

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