每周一题，答案如下
Indigo Corp.’s Income Statement for the year ended December 31, 2001, is as follows:
|
Sales |
$73,000,000 |
|
Cost of Goods Sold |
(47,000,000) |
|
Gross Profit |
26,000,000 |
|
Interest Expense |
(7,000,000) |
|
Depreciation Expense |
(5,000,000) |
|
Loss on Inventory Write Down |
|
|
to Lower of Cost or Market |
(4,000,000) |
|
Income Tax Expense (current) |
(3,000,000) |
|
Net Income |
$ 7,000,000 |
Assume there were no changes in balance sheet accounts for Indigo in 2001. Using the indirect method, what is the net cash provided or used by operating activities for the year ended December 31, 2001?
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A) |
$9,000,000. |
|
B) |
$16,000,000. |
|
C) |
$11,000,000. |
|
D) |
$7,000,000. |
Answer B
The indirect method starts with net income and adds back non-cash expenses or losses and subtracts non-cash revenues or gains. Interest and taxes are cash expenses (if they are current) and are not added back. Non-cash expenses for depreciation ($5,000,000) and inventory write-down ($4,000,000) are added back to net income to arrive at net cash provided by operations ($7,000,000 + $5,000,000 + $4,000,000 = $16,000,000).
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发表于 2006-3-23 18:33
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