A company\'s income statement showed the following: net income, $149,000 and dep

Question

A company's income statement showed the following: net income, $149,000 and depreciation expense, $37,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $11,900; merchandise inventory increased $23,000; and accounts payable increased $5,900. Calculate the net cash provided or used by operating activities.

$143,000.

$191,700.

$145,700.

$181,300.

$215,500.

A company's income statement showed the following: net income, $149,000 and depreciation expense, $37,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $11,900; merchandise inventory increased $23,000; and accounts payable increased $5,900. Calculate the net cash provided or used by operating activities.

Explanation / Answer

Solution:

Caluculation of Cash Flows from Operating Activities Indirect Method:

Net Income 1,49,000

Add: Acounts Receivables 11,900

Less: Inventory (23,000)

Add: Accounts Payable Increased 5,900

   Net Cash Flows = 1,43,800

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