Morbeck Corporation\'s net income last year was $56,000. The company paid a cash

Question

Morbeck Corporation's net income last year was $56,000. The company paid a cash dividend of $31,000 and did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below: Increases (Decreases) Asset and Contra-Asset Accounts: Accounts receivable ($8,000) Inventory ($6,000) Prepaid expenses $12,000 Accumulated depreciation $23,000 Liability Accounts: Accounts payable ($10,000) Accrued liabilities $7,000 Income taxes payable $5,000 Bonds payable $40,000 Based solely on this information, the net cash provided by operating activities under the indirect method on the statement of cash flows would be:

Explanation / Answer

Cash flow from operating activities :

Based solely on this information, the net cash provided by operating activities under the indirect method on the statement of cash flows would be: $83000

Net income 56000 Adjustment to reconcile net income Depreciation expense 23000 Decrease account receivable 8000 Decrease inventory 6000 Increase prepaid expense -12000 Decrease account payable -10000 Increase accured liabiltiy 7000 increase income tax payable 5000 Net cash flow from operating activities 83000

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