Description
The comparative balance sheets for Tobemory Company show these changes in noncash current asset accounts: accounts receivable increase $80,000, prepaid expenses decrease $28,000, and inventories decrease $30,000. Compute net cash provided by operating activities using the indirect method assuming that net income is $250,000.
Explanation & Answer
Net income $250,000
Increase in accounts receivable 80,000
Decrease in prepaid expenses 28,000
Decrease in inventories 30,000
250,000 - 80,000 - 28,000 -30,000 = 112,000
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