The following data are available for Sampson Corporation. $$\begin{array} { l r }
\text { Net income } & \$ 200,000 \
\text { Depreciation expense } & 60,000 \
\text { Dividends paid } & 90,000 \
\text { Loss on sale of land } & 15,000 \
\text { Decrease in accounts receivable } & 30,000 \
\text { Decrease in accounts payable } & 45,000
\end{array}$$ Net cash provided by operating activities is:
A) $140000.
B) $260000.
C) $160000.
D) $240000.

Question

The following data are available for Sampson Corporation. $$\begin{array} { l r } 
\text { Net income } & \$ 200,000 \
\text { Depreciation expense } & 60,000 \
\text { Dividends paid } & 90,000 \
\text { Loss on sale of land } & 15,000 \
\text { Decrease in accounts receivable } & 30,000 \
\text { Decrease in accounts payable } & 45,000
\end{array}$$ Net cash provided by operating activities is:
A) $140000.
B) $260000.
C) $160000.
D) $240000.

Quizplus · Accepted Answer

Net cash provided by operating activities is calculated by starting with net income and adjusting for non-cash expenses, gains and losses, and changes in working capital. Here, start with net income of $200,000, add back depreciation expense ($60,000) and loss on sale of land ($15,000), and adjust for changes in working capital (increase in accounts receivable by $30,000, decrease in accounts payable by $45,000). The dividends paid are not considered in operating activities. Thus, the calculation is $200,000 + $60,000 + $15,000 + $30,000 - $45,000 = $260,000.

The Following Data Are Available for Sampson Corporation Net Cash Provided by Operating Activities Is: A) $140000

The Following Data Are Available for Sampson Corporation Net Cash Provided by Operating Activities Is:
A) $140000