Rice Company,a retailer,has provided the following information pertaining to its recent year of operation:
• Net income,$100,000
• Accounts receivable increased $9,000
• Prepaid insurance decreased $3,000
• Depreciation expense was $15,000
• Gain on sale of land,$2,000
• Wages payable decreased $7,000
• Unearned revenue increased $11,000
Using the indirect method,how much was Rice's net cash provided by operating activities?
A)$89,000.
B)$115,000.
C)$125,000.
D)$111,000.

Question

Quizplus · Accepted Answer

The net cash provided by operating activities is calculated as:
Net income + Depreciation expense - Gain on sale of land - Increase in accounts receivable - Decrease in prepaid insurance + Increase in unearned revenue - Decrease in wages payable

$100,000 + $15,000 - $2,000 - $9,000 + $3,000 + $11,000 - (-$7,000) = $111,000

Therefore, the answer is D.

Rice Company,a Retailer,has Provided the Following Information Pertaining to Its