RobertA

Well well well ...interesting

While using the indirect method to calculate CFO, we need to include working capital changes.
Changes in income tax payable and interest payable come under working capital changes.

Since 50,000$ was paid in tax, taxes payable reduced by 50,000.
100,000$ was paid in interest, interest payable reduced by 100,000

Net income 850,000
Depreciation 200,000
Decrease in Interest payable (100,000)
Decrease in taxes payable (50,000)

Net cash 900,000

How did they get $1,000,000?