Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company. Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities . Deduct increase in current assets. Deduct decrease in current liabilities. Add decrease in current assets. Add the increase in current liability. Add depreciation expense and amortization expense. Add loss on sale of plant assets. Less gain on sale of plant assets. To Compute: Net cash provided by operating activities using indirect method.

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Chapter 12, Problem 12.4E

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Compute: Net cash provided by operating activities using indirect method.

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