Answer:
The net cash flow from operating activities using the indirect method is $166,000
Explanation:
Basically there are three types of activities:
1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.
2. Investing activities: It records those activities which include purchase and sale of the fixed assets
3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.
The computation of the net cash flow from operating activities using the indirect method is shown below:
= Net income + depreciation expense - Increase in Accounts Receivable - Decrease in Accounts Payable $21,000
= $175,000 + $28,000 - $16,000 - $21,000
= $166,000
