Question

Lite Travel Company's accounting records include the following information:
Payments to suppliers $49,000
Collections on accounts receivable 77,000
Cash sales 47,000
What is the amount of net cash provided by operating activities indicated by the amounts provided?
S Company reported net income for 2016 in the amount of $440,000. The company's financial statements also included the following:
Increase in accounts receivable $ 83,000
Decrease in inventory 63,000
Increase in accounts payable 240,000
Depreciation expense 107,000
Gain on sale of land 148,000
What is net cash provided by operating activities under the indirect method?

Answer 1

Answer:

1. Lite Travel Company

The amount of net cash provided by operating activities is:

$75,000.

2. S Company

The net cash provided by operating activities under the indirect method is:

$767,000.

Explanation:

a. Data and Calculations:

1. Payments to suppliers                ($49,000 )

Collections on accounts receivable  77,000

Cash sales                                          47,000

Net cash provided by operations $ 75,000

2. Net Income                                 $440,000

Add Depreciation expense               107,000

Adjusted cash flow                        $547,000

Increase in accounts receivable      (83,000 )

Decrease in inventory                       63,000

Increase in accounts payable         240,000

Net cash provided by operations $767,000

b) The net cash provided by operating activities represents the cash that an entity generates from its normal operating activities as separate from other sources like financing and investing activities.