Rubble Company reported net income of $70000 for the year. During the year accounts receivable increased by $6000 accounts payable decreased by $5000 and depreciation expense of $8000 was recorded. Net cash provided by operating activities for the year is
A) $67000.
B) $89000.
C) $63000.
D) $70000.

Question

Quizplus · Accepted Answer

Net cash provided by operating activities is calculated by adjusting net income for changes in working capital and non-cash expenses. Starting with net income of $70000, subtract the increase in accounts receivable ($6000), add the decrease in accounts payable ($5000), and add back the non-cash depreciation expense ($8000). This results in $70000 - $6000 - $5000 + $8000 = $67000.

Rubble Company Reported Net Income of $70000 for the Year