Birchett Corporation's most recent balance sheet appears below: The company's net income for the year was $91 and it did not sell or retire any property,plant,and equipment during the year.Cash dividends were $22.The net cash provided by (used in)operating activities for the year was:
A)$86
B)$5
C)$96
D)$130

Question

Birchett Corporation's most recent balance sheet appears below:  The company's net income for the year was $91 and it did not sell or retire any property,plant,and equipment during the year.Cash dividends were $22.The net cash provided by (used in)operating activities for the year was:
A)$86 
B)$5 
C)$96 
D)$130

Quizplus · Accepted Answer

To find the net cash provided by (used in) operating activities, we need to start with net income and make adjustments for non-cash expenses and changes in current assets and liabilities. Using the indirect method, we can see that the only adjustment needed is to add back the depreciation expense of $71. This gives us $91 + $71 = $162. We then subtract the cash dividends of $22 to get $140. Finally, we adjust for the increase in accounts receivable of $21 and the decrease in accounts payable of $23, which both represent cash inflows. This gives us a final answer of $140 - $21 + $23 = $96, which corresponds to choice C.

Birchett Corporation's Most Recent Balance Sheet Appears Below: the Company's