Question

CPA Multiple Choice Question 7 Paper Co. had net income of $70,000 during the year. The dividend payment was $10,000. The following information is available: Mortgage repayment $20,000 Available-for-sale debt securities purchased 10,000 increase Bonds payable–issued 50,000 increase Inventory 40,000 increase Accounts payable 30,000 decrease What amount should Paper report as net cash provided by operating activities in its Statement of Cash Flows for the year?

Answer 1

net cash provided by operating activities = $ 0

Step-by-step explanation:

given data

net income = $70,000

dividend payment = $10,000

securities purchased = 10,000

Bonds payable = 50,000

Inventory = 40,000

Accounts payable = 30,000

solution

Cash Flows for the year

net income = $70000

adjustment to reconcile net income to net cash provided by operating activity

increase inventory = -$40000

decrease in accounts payable= -$30000

so total adjustment = - $70000

so net cash provided by operating activities = $ 0