Answer:
Net cash: $199,600
Explanation:
First, we need to identify the increase and decrease in accounts:
+) Decrease in Account Payable = Beginning Account Payable - Ending Account Payable = 12,000 - 11,200 =$8,000
+) Decrease in Account Receivable = Beginning Account Receivable - Ending Account Receivable = 20,000 - 17,600 = $2,400
+) Increase in Prepaid Expense = Ending - Beginning = $5,600 - $4,000 = $1,600
Net cash flows from operating activities of the company can be calculated in indirect method as follow:
Net income $166,000
Adjustments to reconcile the net income to net cash flow from operating activities:
Decrease in account payable ($11,200)
Depreciation Expense $40,800
Amortization of intangible assets $3,200
Decrease in Account Receivable $2,400
Increase in Prepaid Expense ($1,600)
=> Net cash provided = Net income - Decrease in accountable + Depreciation Expense + Amortization of intangible assets + Decrease in Account Receivable - Increase in Prepaid Expense
= 166,000 - 11,200 + 40,800 + 3,200 + 2,400 - 1,600 = $199,600
Net cash: $199,600
