The net income reported on the income statement for the current year was $304,89

Question

The net income reported on the income statement for the current year was $304,891. Depreciation recorded on fixed assets and amortization of patents for the year were $38,392 and $8,383, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

End Beginning
Cash $47,259 $65,412
Accounts receivable $104,186 $129,141
Inventories $88,106 $102,145
Prepaid expenses $6,476 $2,414
Accounts payable (merchandise creditors) $67,367 $50,909

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Select the correct answer.

$390,660

$320,230

$306,371

$403,056

Explanation / Answer

Cash Flow From Operating activities Particulars Net Income 304891 Add: Non Cash Expenses Depreciation 46775 Net income From Operations 351666 Add : Decrease in Current Asset Increase in Current Liaibility Account receivable 24955 Inventories 14039 Account payable 16458 Less: Increase in Current Asset Decrease in Current Liability Prepaid expenses -4062 Net Cash Flow from Operating activities 403056 So correct Option is $403,056

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