Assume that during the year, the Cui Company had net income of $100,000. One of the expenses that was included in the computation of net income was depreciation expense of $3,000. The company also had a gain on the sale of investment property of $4,000. Based on this information, net operating cash flows for the year equal
A) 93000
B) 99000
C) 101000
D) 107000

Question

Quizplus · Accepted Answer

Net operating cash flows are calculated by adjusting net income for non-cash expenses and gains/losses on the sale of assets. In this case, we need to add back depreciation expense and subtract the gain on the sale of investment property:

Net operating cash flows = Net income + Depreciation expense - Gain on sale of investment property
= $100,000 + $3,000 - $4,000
= $99,000

Therefore, the best choice is B.

Assume That During the Year, the Cui Company Had Net