Question

Norbury Corporation's net income last year was $21,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below:

	Increases (Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable	$	11,500
Inventory	$	(3,200	)
Prepaid expenses	$	7,000
Accumulated depreciation	$	20,000
Liability Accounts:
Accounts payable	$	11,000
Accrued liabilities	$	(7,700	)
Income taxes payable	$	2,300

Based solely on this information, the net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be:

Multiple Choice

• $61,900

• $10,700

• $48,600

• $31,300

Answer 1

Answer: $31,300

Calculations:

Norbury Corporation
Statement of cash flows (Partial)
Cash flows from Operating activities:
Net income		$21,000
Adjustments:
Depreciation expense	$20,000
Increase in accounts receivable	($11,500)
Decrease in inventory	$3,200
Increase in prepaid expenses	($7,000)
Increase in accounts payable	$11,000
Decrease in accrued liabilities	($7,700)
Increase in income taxes payable	$2,300	$10,300
Net cash provided by (used in) operating activities		$31,300