Question

Company had net income of $265,307. Depreciation expense is $27,888. During the year, Accounts Receivable and Inventory increased by $17,637 and $28,123, respectively. Prepaid Expenses and Accounts Payable decreased by $2,852 and $4,066, respectively. There was also a loss on the sale of equipment of $7,873. How much cash was provided by operating activities

Answer 1

Answer: The cash flows from operating activities is $254,094.

Explanation: Please see below the calculation of the company's cash flows from operating activitities.

Company

Statement of cash flows

Net income $265,307

Add Depreciation expense 27,888

Add Loss on the sale of equipment 7,873

Increase in accounts receivable (17,637)

Increase in inventory (28,123)

Decrease in prepaid expenses 2,852

Decrease in accounts payable (4,066)

Cash flows from operating activities $254,094