RM Company,a manufacturer,has provided the following information pertaining to its recent year of operation: • Net income,$300,000
• Accounts payable increased $24,000
• Prepaid rent decreased $10,000
• Depreciation expense was $35,000
• Accounts receivable increased $34,000
• Gain on sale of a building was $11,000
• Wages payable decreased $21,000
• Unearned revenue increased $44,000
Using the indirect method,how much was RM's net cash provided by operating activities?
A)$259,000.
B)$327,000.
C)$347,000.
D)$358,000.

Question

Quizplus · Accepted Answer

To calculate net cash provided by operating activities using the indirect method, start with net income and adjust for changes in working capital and non-cash expenses:  Net income: $300,000  Add back non-cash depreciation: +$35,000  Subtract gain on sale of building: -$11,000  Adjust for changes in working capital:  - Increase in accounts payable: +$24,000  - Decrease in prepaid rent: +$10,000  - Increase in accounts receivable: -$34,000  - Decrease in wages payable: -$21,000  - Increase in unearned revenue: +$44,000  Total adjustments: $47,000  Net cash provided by operating activities: $300,000 + $47,000 = $347,000.

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