Carson Company Had Net Income of $21,850 for the Current $\begin{array}{ll}\text { Depreciation } & \$ 8,400 \\\text { Interest expense } & \$ 3,900 \\\text { Provision for taxes } & \$ 5,700\end{array}$

question 129

Essay

Carson Company had net income of $21,850 for the current year. $\begin{array}{ll}\text { Depreciation } & \$ 8,400 \\\text { Interest expense } & \$ 3,900 \\\text { Provision for taxes } & \$ 5,700\end{array}$
Increases (decreases) in selected accounts
$\begin{array}{ll}\text { Accounts receivable } & \$ 1,800 \\\text { Accounts p ayable } & \$ 3,200 \\\text { Income tax payable } & \$(700) \\\text { Inventory } & \$(5,000)\end{array}$ Required:
Compute the net cash provided by operating activities using the indirect method.

---

Definitions:

Loss

The financial result of an operation or transaction where expenses exceed revenues.

Significant Influence

The power to participate in the financial and operating policy decisions of another entity, but not control those policies, typically associated with ownership of 20% to 50% of voting shares.

Net Income

The total earnings of a company after subtracting all expenses from revenues, including taxes and operating expenses.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee's profits or losses.