Question

Leather Shop earned net income of $ 71,000 after deducting depreciation of $ 5,000 and all other expenses. Current assets decreased by $ 4 comma 000​, and current liabilities increased by $ 9,000. How much was Leather Shops cash provided by operating activities​ (indirect method)?

Answer 1

Answer:

$89,000

Explanation:

Given that,

Net Income = $71,000

Depreciation = $5,000

Increase in Current Liabilities = $9,000

Decrease in Current Assets = $4,000

Net Cash from Operating Activities:

= Net Income + Depreciation + Increase in Current Liabilities + Decrease in Current Assets

= $71,000 + $5,000 + $9,000 + $4,000

= $89,000

Therefore, the Leather Shops cash provided by operating activities​ (indirect method) is $89,000.