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    Webster Corp's Statement of Cash Flows: Amount of cash received, depreciation effect

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    Webster Corp.'s statement of cash flow for the year ended December 31, 2005, was prepared using the indirect method, and it included the following items:

    Net income $100,000
    Noncash adjustments:
    Depreciation expense 20,000
    Decrease in accounts receivable 8,000
    Decrease in inventory 25,000
    Increase in accounts payable 10,000
    Net cash flows from operating activities $163,000

    Required:

    a. What amount of cash did Webster receive from customers during the year ended December 31, 2005?
    b. Did depreciation expense provide cash inflow? Comment.

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    Solution Preview

    a. What amount of cash did Webster receive from customers during the year ended December 31, 2005?

    = NI + Depreciation + Decrease in accounts receivable + Decrease in inventory+ Increase in accounts ...

    Solution Summary

    The expert prepares the statement of cash flows using the indirect method. The depreciation effect is examined for the cash inflows.

    $2.49

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