A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on sale of plant assets, $14,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses decreased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.
A) $139,000.
B) $141,000.
C) $145,800.
D) $155,000.
E) $167,000.

Question

Quizplus · Accepted Answer

Start with net income: $124,000 
Add back depreciation: +$30,000 
Subtract gain on sale of plant assets: -$14,000 
Adjustments for changes in current assets and liabilities:
+$9,400 (decrease in accounts receivable)
+$18,000 (increase in merchandise inventory)
-$6,200 (decrease in prepaid expenses)
-$3,400 (increase in accounts payable)
Net cash provided by operating activities = $139,800. 
Therefore the best choice is B, since it is the closest option to $139,800.

A Company's Income Statement Showed the Following: Net Income, $124,000;