Last year Burch Corporation's cash account decreased by $6,000. Net cash provided by (used in) investing activities was $13,000. Net cash provided by (used in) financing activities was $(30,000). On the statement of cash flows, the net cash provided by (used in) operating activities was:

Question

Quizplus · Accepted Answer

To find the net cash provided by operating activities, we need to use the indirect method where we start with net income and adjust for non-cash items and changes in current assets and liabilities. Since we are given the changes in the cash account, investing activities, and financing activities, we can use the formula:

Net cash provided by operating activities = Net income + Non-cash expenses - Non-cash revenues +/- Changes in current assets and liabilities

We are not given net income, non-cash expenses or revenues, or changes in current assets and liabilities, but we can use the fact that the changes in cash account, investing activities, and financing activities should add up to the change in cash from operating activities.

Therefore,

Net cash provided by operating activities = Change in cash from operating activities - Net cash provided by investing activities - Net cash used in financing activities
Net cash provided by operating activities = (-6,000) - 13,000 - (-30,000) = $11,000.

Last Year Burch Corporation's Cash Account Decreased by $6,000