Question

A corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2014 fiscal year was $634,000. Depreciation and amortization expense of $60,000 and $30,000 respectively were included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash:


Decrease in accounts receivable $ 22,000
Increase in inventories 9,400
Increase prepaid expenses 8,900
Increase in salaries payable 10,400
Decrease in income taxes payable 14,400

Determine the net cash flow provided (used) by operating activities.

A. ($692,500)
B. $692,500
C. $723,700
D. ($536,300)
E. ($723,700)

Answer

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