Question

A company's income statement showed the following: net income, $117,000; depreciation expense, $31,500; and gain on sale of plant assets, $5,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,700; merchandise inventory increased $19,500; prepaid expenses increased $6,500; accounts payable increased $3,700. Calculate the net cash provided or used by operating activities. Multiple Choice $143,400. $141,400. $148,200. $130,400. $169,400.

Answer 1

$130,400

Step-by-step explanation:

The computation of net cash provided or used by operating activities is shown below:-

Net cash provided or used by operating activities

Net income $117,000

Depreciation expense $31,500

Gain on sale of plant assets ($5,500)

Accounts receivable decreased $9,700

Increase inventory ($19,500)

Prepaid expenses increased ($6,500)

Increase account payable $3,700

Net cash flow from

operating activities $130,400

Therefore the Net cash flow from operating activities is $130,400