Question

A company had net income of $930,000 in 2016. Depreciation expense is $104,000. During the year, Accounts Receivable and Inventory increased $60,000 and $160,000, respectively. Prepaid Expenses and Accounts Payable decreased $8,000 and $16,000, respectively. There was also a loss on the sale of equipment of $12,000. How much cash was provided by operating activities in 2016

Answer 1

Answer:Cash provided by operating activities= $818,000

Explanation:

Cash Flow from operating activities is the amount of cash generated from the inflows and outflows of the business activities in a company.

Cash Flow from operating activities in 2016

Net income                                                $930,000

Add

Depreciation                                               $104,000

Loss on sale of equipment                        $ 12,000

Prepaid expenses decrease                      $ 8,000

Deduct

Accounts receivable increase                       -$ 60,000

Inventory increase                                           -$160,000

Accounts payable decrease                            -$16,000

Cash provided by operating activities          $818,000