Question

During 2020 the Sandhill Co. had a net income of $84800. In addition, selected accounts showed the following changes: Accounts Receivable $3200 increase Accounts Payable 1000 increase Buildings 4200 decrease Depreciation Expense 1300 increase Bonds Payable 8300 increase What was the amount of cash provided by operating activities?

Answer 1

$83,900

Step-by-step explanation:

Cash flow provided by operating activities is determined by adjusting the Net Income with 1. Non - Cash items previously accounted and 2. Changes in Working Capital items as follows :

Cash flow from Operating Activities = $84,000 - $3,200 + $1,000 + $1,300

= $83,900

Note : Changes in Buildings and Bonds Payable do not affect Operating Activities.