Question

In 2025 the Crane Company had a net income of $84300. In addition, selected accounts showed the following changes:

Accounts Receivable $3500 increase
Accounts Payable 1100 increase
Buildings 4100 decrease
Depreciation Expense 1400 increase
Bonds Payable 7300 increase
What was the amount of cash provided by operating activities?
a $84300.
b $85700.
c $93500. d $83300.

Answer 1

D. $83300.

Step-by-step explanation:

Net Income: $84,300

Adjustments for non-cash expenses:

Depreciation Expense: $1,400

Changes in working capital accounts:

Accounts Receivable: $3,500 (increase)

Accounts Payable: $1,100 (increase)

Now, let's calculate the cash provided by operating activities using the indirect method of the statement of cash flows:

Net Income: $84,300

Depreciation Expense: $1,400

Decrease in Accounts Receivable: $3,500 (negative change since it increased)

Increase in Accounts Payable: $1,100

= Cash Provided by Operating Activities

Calculating the cash provided by operating activities:

$84,300 + $1,400 + (-$3,500) + $1,100 = $83,300

Therefore, the amount of cash provided by operating activities is $83,300.