Question

A company's income statement showed the following: net income, $131,000; depreciation expense, $38,500; and gain on sale of plant assets, $12,500. An examination of the company's current assets and current liabilities showed the following changes accounts receivable decreased $11,100; merchandise inventory increased $26,500; prepaid expenses increased $7,900; accounts payable increased $5,100. Calculate the net cash provided or used by operating activities.

Answer 1

Answer:

$138,800

Explanation:

Particulars                                                  Amount

Net income                                                $131,000

Add: Depreciation                                     $38,500

Less: Gain on sale of plant                       ($12,500)

Add: Decrease in accounts receivable    $11,100

Less: Increase in inventory                       ($26,500)

Less: Increase in prepaid expenses        ($7,900)

Add: increase in account payable            $5,100  

Net Cash in Operating Activities             $138,800