The most recent balance sheet and income statement of Dallavalle Corporation appear below: Cash dividends were $12. The company did not retire or sell any property, plant, and equipment during the year. The net cash provided by (used in) operating activities for the year was:
A) $77
B) $68
C) $40
D) $14

Question

The most recent balance sheet and income statement of Dallavalle Corporation appear below:  Cash dividends were $12. The company did not retire or sell any property, plant, and equipment during the year. The net cash provided by (used in) operating activities for the year was:
A) $77 
B) $68 
C) $40 
D) $14

Quizplus · Accepted Answer

To calculate net cash provided by operating activities, we need to start with net income and then adjust for the changes in current assets and liabilities. 
Starting with net income of $76, we add back depreciation and amortization expense of $17, and subtract the increase in accounts receivable of $1, the decrease in inventory of $8, the increase in accounts payable of $6, and the increase in accrued expenses of $10. 
Therefore, the net cash provided by operating activities is $76 + $17 - $1 - $8 + $6 + $10 = $100. 
Subtracting the cash dividends of $12, we get a final net cash provided by operating activities of $88. 
Therefore, the closest option is B) $68.

The Most Recent Balance Sheet and Income Statement of Dallavalle