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brilliants
6 days ago
15

A company reported net income of $200,000 during 2019. The company reported depreciation expense of $35,000, patent amortization

of $10,000 and a $5,000 loss on the sale of equipment. Using the indirect method, how much is the company’s cash ow from operating activities?A. $245,000.B. $250,000.C. $240,000.D. $235,000.
Business
1 answer:
stepan [3.2K]6 days ago
5 0
The answer is B Explanation: The cash flow from operating activities for the year 2019 is calculated as follows: Net income $200,000 Add: Depreciation $35,000 Amortization of patent $10,000 Loss on the sale of equipment $5,000 Total cash generated from operating activities $250,000 Depreciation, amortization, and losses on equipment sale are non-cash events that reduce net income, so to identify actual cash activities for the year, we add these back to net income to determine the correct figure.
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