pare company reported a net loss of $30,000 for the year ended december 31, 2022. during the year, accounts…

pare company reported a net loss of $30,000 for the year ended december 31, 2022. during the year, accounts receivable decreased $15,000, inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded. using the indirect method, during 2022, operating activities\no used net cash of $25,000.\no provided net cash of $25,000.\no used net cash of $10,000.\no provided net cash of $10,000.

pare company reported a net loss of $30,000 for the year ended december 31, 2022. during the year, accounts receivable decreased $15,000, inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded. using the indirect method, during 2022, operating activities\no used net cash of $25,000.\no provided net cash of $25,000.\no used net cash of $10,000.\no provided net cash of $10,000.

Answer

Explanation:

Step1: Recall cash - flow from operating activities formula

The formula for cash - flow from operating activities (indirect method) is: Net income (loss) + Depreciation expense+ Decrease in accounts receivable - Increase in inventory+ Increase in accounts payable. Given net loss = - $30,000$, depreciation expense = $30,000$, decrease in accounts receivable = $15,000$, increase in inventory = $25,000$, increase in accounts payable = $20,000$.

Step2: Substitute values into the formula

[ \begin{align*} \text{Cash flow from operating activities}&=- 30000 + 30000+15000 - 25000+20000\ &=(-30000 + 30000)+(15000+20000)-25000\ &=0 + 35000-25000\ &=10000 \end{align*} ] Since the result is positive, cash is provided.

Answer:

Provided net cash of $10,000$.