Majorn Auto Parts Store had net income of $86,000 for the year just ended. Majorn collected...
Majorn Auto Parts Store had net income of $86,000 for the year just ended. Majorn collected the following additional information to prepare its statement of cash flows for the year:
| Increase in accounts receivable | $ | 112,000 |
| Decrease in inventory | $ | 23,000 |
| Decrease in accounts payable | $ | 40,000 |
| Increase in retained earnings | $ | 34,000 |
| Cash received from sale of building | $ | 220,000 |
| Gain on sale of building | $ | 52,000 |
| Depreciation expense | $ | 37,000 |
Majorn uses the indirect method to prepare its statement of cash flows. What is Majorn's net cash provided by (used in) operating activities?
Multiple Choice
-
$46,000
-
$(58,000)
-
$200,000
-
$294,000
Homework Answers
Answer:- $(58,000)
Statement of cash flows in indirect method-
Start with net income
>the non cash expenses and losses must be added back in and the gains must be subtracted.
>asset account increases-subtract the amount from the income
>asset account decreases-add amount to income
>liability account increases-add amount to income
>liability account decreases-subtract amount from income
so, $86,000+37,000+23,000=146,000-112,000-52,000-40,000=$(58,000)
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