Lite Travel Company's accounting records include the following information: What is the amount of net cash provided by operating activities indicated by the amounts provided?
A)$50,000.
B)$73,000.
C)$94,000.
D)$129,000.

Question

Lite Travel Company's accounting records include the following information:  What is the amount of net cash provided by operating activities indicated by the amounts provided?
A)$50,000. 
B)$73,000. 
C)$94,000. 
D)$129,000.

Quizplus · Accepted Answer

Net cash provided by operating activities can be calculated using the indirect method from the statement of cash flows. The adjustments to net income are as follows:
Depreciation expense: $35,000 (added back)
Decrease in accounts receivable: $20,000 (added back)
Increase in prepaid expenses: $8,000 (subtracted)
Increase in accounts payable: $4,000 (added back)
Increase in income taxes payable: $6,000 (added back)
Net cash provided by operating activities = $35,000 + $20,000 + $4,000 + $6,000 - $8,000 = $73,000. Therefore, the best choice is B, $73,000.

Lite Travel Company's Accounting Records Include the Following Information