Following Data for a company year ending Dec 31,2011 & 2012 Net Income for 2012

Question

Following Data for a company year ending Dec 31,2011 & 2012

Net Income for 2012                                                 $90,000

Sales Revenue                                                          500,000

COGS                                                                          300,000

Depreciation Expense for 2012                             60,000

Amortization of goodwill for 2012                          10,000

Inetrest Expense of Short Term Debt for 2012    3,500

Dividends declared and paid in 2012                  65,000

                                                              Dec 31 2012       Dev 31 2011

Accounts Receivable (net)                      30,000               43,000

Inventory                                                     50,000               42,000

Accounts Payable                                     56,000               59,400

Show how the amount of Cash privded by operations for 2012 is computed using the indirect method?

Explanation / Answer

NET INCOME = 90000

ADD:Depreciation Expense =60,000

ADD:Amortization of goodwill =10,000

ADD:INTEREST Expense of Short Term DebT =3500

ADD:DECREASE IN Accounts Receivable = 13000

LESS: INCREASE IN Inventory = (8000)

LESS:DECREASE IN Accounts Payable = (3400)

NET CASHINFLOW FROM OPERATING ACTIVITIES = 165100

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