Indirect method

A company reported $1,000 in depreciation expense. If the change in the cash balance for the year was $12,000 using the indirect method, the cash collections and cash flow from operations (CFO) using the direct method is closest to: Net sales 50,000 Cash flow from financing -4250 Cash expenses 4250 Cash inputs 17000 Cash taxes 7000 Increase in receivables 500 Cash flow from investing -5000 Cash collections CFO A) $49500 $21250 B) $49500 $22250 Answer A. Can someone breakdown the calculation please?

Cash Collections = Net Sales - Incr in AR = 50000 - 500 = 49500 CFO = 49500 - Cash Exp 4250 - Cash Inputs 17000 - Cash Taxes 7000 = 21250 Choice A And this is the Direct Method - not the indirect method

Thanks CP! We subtract Cash taxes (an outflow) but I was wondering why we subtract Cash Input (an Inflow)?

Cash Inputs from your direct statement method --> COGS +/- Change in AP +/- Change in Inv. Cash for your COGS, etc. etc.