Darwin Company,a manufacturer,has provided the following information pertaining to its recent year of operation: • Net income,$200,000
• Accounts receivable increased $18,000
• Prepaid insurance increased $7,000
• Depreciation expense was $25,000
• Loss on sale of a building was $22,000
• Wages payable increased $14,000
• Unearned revenue decreased $21,000
Using the indirect method,how much was Darwin's net cash provided by operating activities?
A)$227,000.
B)$215,000.
C)$171,000.
D)$257,000.

Question

Quizplus · Accepted Answer

The net cash provided by operating activities can be calculated by adjusting net income for changes in operating assets and liabilities as follows:

Net Income: $200,000
Add: Depreciation Expense: $25,000
Add: Loss on Sale of Building: $22,000
Increase in Accounts Receivable: ($18,000)
Increase in Prepaid Insurance: ($7,000)
Increase in Wages Payable: $14,000
Decrease in Unearned Revenue: ($21,000)

Net Cash Provided by Operating Activities: $215,000

Darwin Company,a Manufacturer,has Provided the Following Information Pertaining to Its