The Net Income Reported on the Income Statement for the Current

The net income reported on the income statement for the current year was $310,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: $\begin{array}{lll}\text { Beginning } & {\text { End }} \\\hline \$ 60,000 & \$ 50,000 & \text { Cash } \\108,000 & 112,000 & \text { Accounts receivable } \\93,000 & 105,000 & \text { Inventories } \\6,500 & 4,500 & \text { Prepaid expenses }\\89,000 & 75,000&\text { Accounts payable (merchandise creditors) }\end{array}$ What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

A) $233,000
B) $289,000
C) $387,000
D) $331,000

Correct Answer:

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