Blue Company's net income last year was $35,000. Changes in selected balance sheet accounts for the year appear below: Increases (Decreases)Debit balances: Accounts receivable$(7,000)Inventory8,000Prepaid expenses(6,000) Credit balances: Accumulated depreciation10,000Accounts payable13,000Accrued liabilities(5,000)Taxes payable5,000Based solely on this information, net cash flow from operating activities under the indirect method on the statement of cash flows would be: a.$63,000. b.$81,000. c.$45,000. d.$29,000.

Answered: Blue Company's net income last year was…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Blue Company's net income last year was $35,000. Changes in selected balance sheet accounts for the year appear below:

	Increases
	(Decreases)
*Debit balances:*
Accounts receivable	$(7,000)
Inventory	8,000
Prepaid expenses	(6,000)

*Credit balances:*
Accumulated depreciation	10,000
Accounts payable	13,000
Accrued liabilities	(5,000)
Taxes payable	5,000

Based solely on this information, net cash flow from operating activities under the indirect method on the statement of cash flows would be:

	a.	$63,000.
	b.	$81,000.
	c.	$45,000.
	d.	$29,000.

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