Pare Company reported a net loss of $30000 for the year ended December 31 2016. During the year accounts receivable decreased $15000 merchandise inventory increased $25000 accounts payable increased by $30000 and depreciation expense of $20000 was recorded. During 2016 operating activities
A) used net cash of $10000.
B) used net cash of $25000.
C) provided net cash of $10000.
D) provided net cash of $25000.

Question

Quizplus · Accepted Answer

To calculate the net cash provided by operating activities, start with the net loss of $30,000. Adjust for changes in working capital and non-cash expenses: add the decrease in accounts receivable ($15,000), add the increase in accounts payable ($30,000), subtract the increase in inventory ($25,000), and add back the depreciation expense ($20,000). The total is $10,000 provided by operating activities.

Pare Company Reported a Net Loss of $30000 for the Year