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