Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries.
Paid $60,000 to purchase office equipment.
Paid $15,000 for utilities.
Paid $6,000 in dividends.
Collected $245,000 from customers.
What was Jackson's net cash provided by operating activities?
A) $95,000
B) $35,000
C) $110,000
D) $89,000

Question

Quizplus · Accepted Answer

Net cash provided by operating activities is calculated as cash collected from customers minus cash paid for operating expenses (salaries and utilities). So, $245,000 - $135,000 - $15,000 = $95,000. The purchase of office equipment and dividends are not included in operating activities.

Jackson Company Recorded the Following Cash Transactions for the Year