Question

During 2020 the Blossom Company had a net income of $84000. In addition, selected accounts showed the following changes: Accounts Receivable $2500 increase Accounts Payable 800 increase Buildings 3800 decrease Depreciation Expense 1300 increase Bonds Payable 7000 increase What was the amount of cash provided by operating activities? $91800. $85300. $83600. $84000.

Answer 1

Answer:

The amount of cash provided by operating activities was $83,600

Explanation:

The amount of cash provided by operating activities is calculating by using following formula:

Net Income + Non-Cash Expenses (Depreciation, Depletion & Amortization Expense) + Non-Operating Losses (Loss on Sale of Non-Current Assets) − Non-Operating Gains (Gain on Sale of Non-Current Assets) + Decrease in Current Assets − Increase in Current Assets + Increase in Current Liabilities − Decrease in Current Liabilities.

In the Blossom Company,

The amount of cash provided by operating activities = Net Income + Depreciation Expense - Increase in Accounts Receivable + Increase in Accounts Payable = $84,000 + $1,300 - $2,500 + $800 = $83,600