XYZ Corporation is preparing its cash flow statement for the fiscal year ended December 31, 2023. During the year, XYZ Corporation reported the following transactions: Net income of $300,000 Depreciation expense of $50,000 Gain on sale of equipment of $20,000 Increase in accounts payable of $15,000 Decrease in inventories of $10,000 Capital expenditures of $70,000 Based on the information provided, which of the following amounts would be reported as cash flows from operating activities in the cash flow statement prepared using the indirect method?

Exam

CFA Level 1

Section

Difficulty

Financial Reporting and Analysis

Cash Flows from Operating Activities Calculation

Very Hard Financial Statements Cash Flow Statement

XYZ Corporation is preparing its cash flow statement for the fiscal year ended December 31, 2023. During the year, XYZ Corporation reported the following transactions:

Net income of $300,000
Depreciation expense of $50,000
Gain on sale of equipment of $20,000
Increase in accounts payable of $15,000
Decrease in inventories of $10,000
Capital expenditures of $70,000

Based on the information provided, which of the following amounts would be reported as cash flows from operating activities in the cash flow statement prepared using the indirect method?

$345,000

$375,000

$385,000

Hint

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