Following Data for a company year ending Dec 31,2011 & 2012 Net Income for 2012
ID: 2381857 • Letter: F
Question
Following Data for a company year ending Dec 31,2011 & 2012
Net Income for 2012 $90,000
Sales Revenue 500,000
COGS 300,000
Depreciation Expense for 2012 60,000
Amortization of goodwill for 2012 10,000
Inetrest Expense of Short Term Debt for 2012 3,500
Dividends declared and paid in 2012 65,000
Dec 31 2012 Dev 31 2011
Accounts Receivable (net) 30,000 43,000
Inventory 50,000 42,000
Accounts Payable 56,000 59,400
Show how the amount of Cash privded by operations for 2012 is computed using the indirect method?
Explanation / Answer
NET INCOME = 90000
ADD:Depreciation Expense =60,000
ADD:Amortization of goodwill =10,000
ADD:INTEREST Expense of Short Term DebT =3500
ADD:DECREASE IN Accounts Receivable = 13000
LESS: INCREASE IN Inventory = (8000)
LESS:DECREASE IN Accounts Payable = (3400)
NET CASHINFLOW FROM OPERATING ACTIVITIES = 165100