Roberts Company had net income of $890,000 for the year ending 12/31/2022.Depreciation expense for 2022 is $110,000.During the year, accounts receivable and inventory increased by $60,000 and $160,000, respectively.Prepaid expenses and accounts payable decreased $8,000 and $16,000, respectively.There was also a loss on the sale of equipment of $12,000.How much cash was provided by operating activities in 2022?
A)$760,000.
B)$784,000.
C)$1,080,000.
D)$1,128,000.

Question

Quizplus · Accepted Answer

To calculate cash provided by operating activities, start with net income and adjust for non-cash expenses and changes in working capital. Net income is $890,000. Add back depreciation ($110,000) and the loss on sale of equipment ($12,000). Subtract increases in accounts receivable ($60,000) and inventory ($160,000). Add the decrease in accounts payable ($16,000) and subtract the decrease in prepaid expenses ($8,000). The calculation is: $890,000 + $110,000 + $12,000 - $60,000 - $160,000 + $16,000 - $8,000 = $784,000.

Roberts Company Had Net Income of $890,000 for the Year