Question

A company had net income of $210,000. Depreciation expense is $27,000. During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively. Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively. There was also a loss on the sale of equipment of $2,000. Cash provided by operating activities was $Placeholder for missing word.How much cash was provided by operating activities?

a. $179000
b. $241000
c. $271000
d. $175000

Answer 1

a. $179000

Step-by-step explanation:

The computation of the cash provided by operating activities is shown below:

Net Income $2,10,000

Add : Depreciation expense $27,000

Add : Loss on sale of equipment $2,000

Add : Decrese in prepaid expenses $5,000

Less : Decrease in accounts payable $6,000

Less : Increse in accounts receivable $17,000

Less :Increase in inventory $42,000

Cash provided by operating activities $179,000