Question

Wildhorse Co. Had net income of $961200 for the year ending 12/31/2022. Depreciation expense for 2022 is $118800. During the year, accounts receivable and inventory increased $64800 and $172800, respectively. Prepaid expenses and accounts payable decreased $8640 and $17280, respectively. There was also a loss on the sale of equipment of $12960. How much cash was provided by operating activities in 2022?

Answer 1

"$846720" is the right answer.

Explanation:

The given values are:

Net income,

= $961200

Depreciation,

= $118800

Inventory increased,

= $172800

Accounts receivable,

= $64800

Prepaid expenses,

= $8640

Accounts payable decreased,

= $17280

Sale equipment's loss,

= $12960

Now,

The cash provided by operating activities will be:

=
`Net \ income + Depreciation + Sale \ equipment's \ loss + decrease \ in \ prepaid \ expenses - accounts \ receivable \ Increase - Inventory \ increase - decrease \ in \ accounts \ payable`On substituting the given values, we get

=
`961,200 + 118,800 + 12,960 + 8,640 - 64,800 - 172,800 - 17,280`

=
`846720` ($)