Chino Company reported net income of $23,000 for the current year. During the ye

Question

Chino Company reported net income of $23,000 for the current year. During the year, Inventory decreased by $7,500, Accounts Payable decreased by $8,250, Depreciation Expense was $10,500, and Accounts Receivable increased by $7,000. If the indirect method is used, what is the net cash provided by operating activities?

A). $25,750.

B). $56,250.

C). $42,250.

D). $11,000.

Chino Company reported net income of $23,000 for the current year. During the year, Inventory decreased by $7,500, Accounts Payable decreased by $8,250, Depreciation Expense was $10,500, and Accounts Receivable increased by $7,000. If the indirect method is used, what is the net cash provided by operating activities?

Explanation / Answer

Calculation of Net Cash Flows from Operating Activities Net Income 23000 Add: Inventory Decreased 7500 Less Accounts Payable Decreased -8250 Add: Depreciation 10500 Less: Accounts Receivable -7000 Cash Flow from Operating Activities 25750 The correct answer is A) $ 25750

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