Marjorie is preparing the Statement of Cash Flows for her company. Based on the following information, what would be the Cash Provided by Operating Activities using the Indirect Method?
|Decrease in Accounts Receivable||$2,000|
|Increase in Wages Payable||$1,000|
|Increase in Equipment||$6,000|
|Decrease in Bonds Payable||$15,000|
Operating cash flow:
Operating cash flow refers to the cash flow provided by the operations of the company. It is calculated to analyze whether the company is generating enough cash flows to work in future or the operations need to be revived.
Answer and Explanation:
Option (B) $13,000 is correct.
Computation of cash provided by operating activity
|Add: Decrease in account receivable||$2,000|
|Add: Increase in wages payable||$1,000|
|Cash flow from operating activity||$13,000|
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from Finance 101: Principles of FinanceChapter 10 / Lesson 4