Question

7. The following information is available from the current period financial statements: 

Net income Depreciation expense Increase in accounts receivable Decrease in accounts payable $175,000 28,000 16,000 21,000 

The net cash flow from operating activities using the indirect method is 

a. $166,000 

b. $184,000 

c. $110,000 

d. $240,000 

8. A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows: 

a. an increase of $54,000 from investing activities 

b. an increase of $63,000 from investing activities and a deduction from net income of $9,000 

c. an increase of $9,000 from investing activities 

d. an increase of $54,000 from investing activities and an addition to net income of $9,000 --

Answer 1