Darwin Company, a manufacturer, has provided the following information pertaining to its recent year of operation: • Net income, $200,000 • Accounts receivable increased $18,000 • Prepaid insurance increased $7,000 • Depreciation expense was $25,000 • Loss on sale of a building was $22,000 • Wages payable increased $14,000 • Unearned revenue decreased $21,000 Using the indirect method, how much was Darwin's net cash provided by operating activities?

$215,000

Explanation: Using the indirect method, Net cash  by Darwin company is given  

=Net Cash Flow from Operating Activities of Darwin Company.

Net income                                                       $200,000

Accounts receivable (subtract)                       $18,000

Prepaid insurance increase (subtract )            $7,000

Depreciation expense  (add)                          $25,000

Loss on sale of a building (add)                        $22,000

Wages payable increased (add)                       $14,000

Unearned revenue decreased ( subtract )     $21,000

Net Cash  Flow                                                $215,000

In general, the formula for calculating indirect method for Net Cash Flow is Net Income  +Non-Cash Expenses:(Depreciation, Depletion & Amortization Expense)+Non-Operating Losses:

(Loss on Sale of Non-Current Assets)  −Non-Operating Gains:  (Gain on Sale of Non-Current Assets)  + Decrease in Current Assets:(Accounts Receivable, Prepaid Expenses, Inventory etc.)  − Increase in Current Assets+Increase in Current Liabilities:(Accounts Payable, Accrued Liabilities, Income Tax Payable etc.)  − Decrease in Current Liabilities (from xplaind.com)

According to the indirect method, Our Net cash flow will be

Net cash flow =Net  income - (Accounts receivable increase  +  prepaid insurance increase + unearned revenue decrease ) + (Depreciation expense + loss on sale of building + wages payable  increase)

Net Cash flow=$200,000 -($18,000+$7,000+$21,000) + (25,000+22,000 14,000)= $215,000

$2.00 for three shots.