Holly Oaks, Inc. is preparing the company\'s statement of cash flows for the fis

Question

Holly Oaks, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:

$373,200.

$170,000.

$267,000.

$329,900.

$256,000.

Net income $ 231,000 Depreciation expense–equipment 43,000 Gain on the sale of equipment 5,500 Increase in merchandise inventory 53,100 Decrease in accounts receivable 18,900 Increase in accounts payable 21,700 Purchase of land 300,000 Proceeds from sale of equipment 93,000 Issuance of common stock 150,000 Payment of cash dividends 37,000

Explanation / Answer

Using indirect method, cash flow from operating activities:

Net Income 231000

+ Depreciation 43000

- Gain on sale of equipment 5500

- Increase in inventory 53100

+ Decrease in account receivable 18900

+ increase in account payable 21700

= Net cash flow from operating activities = 256000

Hence option E is correct.

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