Speedy Supermarket reported net income of $24,000 in 2017.No dividends were declared nor paid during the year.Changes in the selected accounts during the year are: $$\begin{array} { l c }
& \text { Increase/(Decrease) } \
\text { Accounts receivable } & \$ 16,200 \
\text { Inventory } & 11,800 \
\text { Prepaid expenses } & ( 4,000 ) \
\text { Accounts payable } & 27,300 \
\text { Salaries payable } & ( 3,000 )
\end{array}$$ How much is the company's net cash provided by operating activities?

Question

Speedy Supermarket reported net income of $24,000 in 2017.No dividends were declared nor paid during the year.Changes in the selected accounts during the year are: $$\begin{array} { l c } 
& \text { Increase/(Decrease) } \
 \text { Accounts receivable } & \$ 16,200 \
\text { Inventory } & 11,800 \
\text { Prepaid expenses } & ( 4,000 ) \
\text { Accounts payable } & 27,300 \
\text { Salaries payable } & ( 3,000 )
\end{array}$$ How much is the company's net cash provided by operating activities?

Quizplus · Accepted Answer

The net cash provided by operating activities can be calculated by adjusting the net income for changes in working capital accounts. The calculation is as follows: Net Income = $24,000 + Increase in Accounts Receivable (-$16,200) + Increase in Inventory (-$11,800) + Decrease in Prepaid Expenses ($4,000) + Increase in Accounts Payable ($27,300) + Decrease in Salaries Payable (-$3,000) = $24,300.

Speedy Supermarket Reported Net Income of $24,000 in 2017 How Much Is the Company's Net Cash Provided by Operating