MOSS COMPANY Selected Balance Sheet Information December 31, 2019 and 2018 2019 2018 Current assets Cash $ 84,650 $ 26,800 Accounts receivable 25,000 32,000 Inventory 60,000 54,100 Current liabilities Accounts payable 30,400 25,700 Income taxes payable 2,050 2,200 MOSS COMPANY Income Statement For Year Ended December 31, 2019 Sales $ 515,000 Cost of goods sold 331,600 Gross profit 183,400 Operating expenses Depreciation expense $ 36,000 Other expenses 121,500 157,500 Income before taxes 25,900 Income taxes expense 7,700 Net income $ 18,200 Use the information above to calculate cash flows from operating activities using the indirect method.

The correct answer is $59,850.

Explanation:

According to the scenario, the computation of the given data are as follows:

Net income = $18,200

Depreciation expense = $36,000

Account receivable decrease = Account receivable in 2018 - Account receivable in 2019

= $32,000 - $25,000 = $7,000

Inventory increase = inventory in 2019 - inventory in 2018

= $60,000 - $54,100 = $5,900

Accounts payable increase  = Accounts payable in 2019 - accounts payable in 2018

= $30,400 - $25,700 = $4,700

Income tax payable = Income tax in 2018 - income tax in 2019

= $2,200 - $2,050 = $150

So, Cash flow can be calculated as follows:

Cash flow = Net income + Depreciation expense + Account receivable decrease - Inventory increase + Accounts payable increase - Income tax payable

= $18,200 + $36,000 + $7,000 - $5,900 + $4,700 - $150

= $59,850

answer; institution based;