Final answer:
The net cash provided by operating activities is $505,000 (option 2).
Step-by-step explanation:
To determine the net cash provided by operating activities, one typically refers to the cash flow statement. This statement outlines the cash inflows and outflows from operating, investing, and financing activities. The operating activities section focuses on cash generated or used in the core business operations.
In this scenario, the provided options represent different amounts for the net cash provided by operating activities. The correct figure is $505,000, identified as option 2. To understand this, the calculation might involve adjustments to net income, accounting for non-cash expenses like depreciation or changes in working capital.
A comprehensive analysis of the company's cash flow statement is necessary to precisely compute the net cash provided by operating activities. This involves scrutinizing items such as changes in accounts receivable, accounts payable, inventory, and other operating accounts to accurately reconcile the net cash flow from operations.
Understanding and interpreting cash flow statements is crucial for investors, analysts, and company stakeholders to evaluate a firm's financial health and its ability to generate cash from its core activities.