Answer:
$37,500
Explanation:
The computation of the net cash provided or used by operating activities are as follows
Cash flow from operating activities
Net income $41,500
Add: depreciation expenses $48,000
Add: Decrease in account receivable ($162,000 - $188,000) $26,000
Less: Increase in inventory ($442,000 - $370,000) -$72,000
Add: Decrease in prepaid expenses ($11,500 - $14,000) $2,500
Less: Decrease in account payable ($370,000 - $384,000) -$14,000
Less: Decrease in accrued liabilities ($8,500 - $12,000) -$3,500
Add: Increase in income tax payable ($36,000 - $27,000) $9,000
Cash flow provided by operating activities $37,500
The negative sign indicates the cash outflow and the positive sign indicated the cash inflow
