A company's income statement showed the following: net income,$134,000;depreciation expense,$30,000;and gain on sale of plant assets,$4,000.An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400;merchandise inventory increased $18,000;prepaid expenses increased $6,200;accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.
A)$156,600.
B)$141,000.
C)$96,600.
D)$148,600.
E)$88,600.

Question

Quizplus · Accepted Answer

To calculate net cash provided by operating activities, adjust net income for non-cash expenses and changes in working capital: $134,000 (net income) + $30,000 (depreciation) - $4,000 (gain) + $9,400 (decrease in accounts receivable) - $18,000 (increase in inventory) - $6,200 (increase in prepaid expenses) + $3,400 (increase in accounts payable) = $148,600.

A Company's Income Statement Showed the Following: Net Income,$134,000;depreciation Expense,$30,000;and