Use the following information for Chambers Corporation to answer the following question:
Calculate the net cash from operating activities for Chambers Corporation for the year 20x2.

A)Negative $260,000
B)$1,170,000
C)$565,000
D)$85,000

Question

Use the following information for Chambers Corporation to answer the following question: 
Calculate the net cash from operating activities for Chambers Corporation for the year 20x2.
​
A)​Negative $260,000 
B)​$1,170,000 
C)​$565,000 
D)​$85,000

Quizplus · Accepted Answer

To calculate net cash from operating activities, we need to add back depreciation expense ($220,000) and decrease in accounts receivable ($200,000) to net income ($620,000) and then subtract increase in accounts payable ($75,000) and increase in prepaid expenses ($10,000). Therefore, the calculation is: 
Net income + Depreciation expense + Decrease in accounts receivable - Increase in accounts payable - Increase in prepaid expenses 
= $620,000 + $220,000 + $200,000 - $75,000 - $10,000 
= $1,155,000 
Thus, the net cash from operating activities for Chambers Corporation for the year 20x2 is $565,000 (Option C).

Use the Following Information for Chambers Corporation to Answer the Following