Stojko Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used) in operating activities?
A) $100,000 provided.
B) $(100,000) used.
C) $80,000 provided.
D) $(80,000) used.
E) $(10,000) used.

Question

Quizplus · Accepted Answer

Using the indirect method of the statement of cash flows, we can calculate the cash provided or used in operating activities by starting with the net decrease in cash and adding back the cash used in investing and financing activities. 
Cash provided (used) in operating activities = Net Decrease in Cash + Net Cash Used in Investing Activities + Net Cash Used in Financing Activities 
= -$10,000 + (-$52,000) + (-$38,000) 
= -$100,000 
Since this amount is negative, it means that cash was used in operating activities. Therefore, the correct answer is option C, $80,000 provided.

Stojko Corporation Had a Net Decrease in Cash of $10,000