Question

The information below was obtained from the financial statements of Faraday Corp. Based on this information, what was the amount of the net cash provided by operating activities during the current year?

Prior Year Current Year
Net Income $500,000 $655,000
Depreciation Expense 60,000 72,000
Accounts Receivable 89,000 78,000
Inventory 116,000 142,000
Accounts Payable 120,000 117,000
Salaries and Wages Payable 56,000 68,000
A. $721,000
B. $661,000
C. $713,000
D. $637,000

Answer 1

A. $721,000

Step-by-step explanation:

Particulars Amount($)

Net income $655,000

Add: depreciation $72,000

Add:decrease in Account receivable $11,000

(89000-78000)

Less:increase in inventory ($26000)

(142000-116000

Less:decrease in account payable ($3000)

(120000-117000)

Add:increase in salaries and wages payable $12000

(68000-56000)

Net cash from operating activities $721000