Roo, Inc. reported the following data: Net income $118,000 Depreciation expense
ID: 2381775 • Letter: R
Question
Roo, Inc. reported the following data:
Net income
$118,000
Depreciation expense
15,000
Loss on disposal of equipment
11,000
Increase in accounts receivable
7,000
Decrease in accounts payable
(2,000)
Prepare the cash flows for operating activities under the indirect method as it would appear on the statement of cash flows. (6 points)
ANS:
Net cash flow from operating activities
Net income
$118,000
Depreciation expense
15,000
Loss on disposal of equipment
11,000
Increase in accounts receivable
7,000
Decrease in accounts payable
(2,000)
Explanation / Answer
Net income = 118000
ADD:-Depreciation expense =15000
ADD:-Loss on disposal of equipment=11000
LESS:-Increase in accounts receivable = (7000)
LESS:-Decrease in accounts payable =(2000)
NET CASHFLOW GENERATED FROM OPERATING ACTIVITIES = 135000
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