Felix Company uses the indirect method to prepare the statement of cash flows. R
ID: 2453052 • Letter: F
Question
Felix Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Additional information provided by the company includes the following:
Sale Revenue $245,000
Interest Revenue 2,000
Gain on Sale of Plant Assets 5,000
Total Revenues and Gains $252,000
Cost of Goods Sold 118,000
Salary Expense 43,000
Depreciation Expense 13,00
Other Operating Expense 25,000
Interest Expense 1,500
Income Tax Expense 5,500
Total Expenses 206,000
Net Income (loss) $46,000
1) Current assets, other than cash, increased by $24,000 2) Current liabilities decreased by $1,000 How much is the net cash provided by operating activities? A) $21,000 B) $34,000 C) $29,000 D) $39,000
Explanation / Answer
Income statement is not provided. Due to lack of information cash flow statement cannot be made. The effect of increase in current assets is it decreases the cash flow from operating activities. The decrease in current liabilities decreases the cash flow from operating activities. So in both cases it will be deducted from net income
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