Question

Sage beverage company reported the following items in the most recent year. net income $48,600 dividends paid 5,100 increase in accounts receivable 11,570 increase in accounts payable 8,150 purchase of equipment (capital expenditure) 8,620 depreciation expense 5,150 issue of notes payable 24.000 compute net cash provided by operating activities, the net change in cash during the year. (shew either a - sign e.g. -15,000 or in parenthesis e.g. (15,000))

Answer 1

Net cash provided by operating activities is $50,330, calculated by starting with net income, adding back non-cash expenses like depreciation, and adjusting for changes in working capital such as increases in accounts receivable and payable.

Step-by-step explanation:

To compute the net cash provided by operating activities for Sage Beverage Company, we start with the net income and adjust it for changes in working capital and non-cash expenses. The formula for calculating net cash flow from operating activities is as follows:

• Start with net income.
• Add back non-cash expenses (depreciation).
• Adjust for changes in working capital (accounts receivable, accounts payable).

Net cash provided by operating activities will be calculated as:

Net Income: $48,600

Add: Depreciation Expense: $5,150

Deduct: Increase in Accounts Receivable: ($11,570)

Add: Increase in Accounts Payable: $8,150

Net cash provided by operating activities: $48,600 + $5,150 - $11,570 + $8,150 = $50,330.

The net change in cash during the year can be calculated by accounting for all cash inflows and outflows including operating activities, financing activities, and investing activities. However, insufficient details on financing and investing activities (except for the purchase of equipment and issuing of notes payable) are provided to calculate the overall net change in cash.