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20 October, 18:42

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?

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  1. 20 October, 19:39
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    The cash was provided by operating activities is $182,000

    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
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