The net income reported on the income statement for the current year was $¥ 2,250,000$. Depreciation recorded on plant assets was $¥ 380,000$. Accounts receivable and inventories increased by $¥ 20,000$ and $¥ 80,000$, respectively. Prepaid expenses and accounts payable decreased by $¥ 10,000$ and $¥ 110,000$ respectively. How much cash was provided by operating activities?

Question

Quizplus · Accepted Answer

To calculate cash provided by operating activities, adjust net income for non-cash expenses and changes in working capital: $¥ 2,250,000$ (net income) + $¥ 380,000$ (depreciation) - $¥ 20,000$ (increase in accounts receivable) - $¥ 80,000$ (increase in inventories) + $¥ 10,000$ (decrease in prepaid expenses) - $¥ 110,000$ (decrease in accounts payable) = $¥ 2,050,000$.

The Net Income Reported on the Income Statement for the Current