Question

A company had net income of $210,000. Depreciation expense is $26,000. During the year, Accounts Receivable and Inventory increased $15,000 and $40,000, respectively. Prepaid Expenses and Accounts Payable decreased $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000. How much cash was provided by operating activities?

Answer 1

The cash was provided by operating activities is $182,000

Step-by-step explanation:

Net Income = $210,000

Add: Depreciation Expense = $26,000

Add: Loss on Sale of Equipment = $3,000

Add: Decrease in Prepaid Expenses = $2,000

Less: Increase in Inventory = $40,000

Less: Increase in Accounts Receivables = $15,000

Less: Decrease in Accounts Payables = $4,000

Net income = $210,000 + $26,000 + $3,000 + $2,000 - $40,000 - $15,000 - $4,000 = $182,000

Net Cash from Operating Activities =$182,000