Question

Kraco Corporation reported 2010 set income of $450,000, includang the effects of deprecaation expense of $60,000, and amortization expense on a patest of $10,000. Also, cash of $50,000 was borrowed on a 5-year note payable.


Based on this data, total cash inflow from operating activities using the indirect method for 2010 was:


a. 1470.000


b. 440,000


c. 570,000


d. 520,000

Answer 1

Answer:

d. 520,000

Explanation:

The computation of the cash flow from operating activities using the indirect method is shown below:

cash flows from operating activities

Net income reported $450,000

Add: depreciation expenses $60,000

Add: Amortization expenses $10,000

Net cash flow provided by operating activity is $520,000

We simply added the above three items so that the correct amount could come