Angel Heating Co. reported $27,000 of net income. The company uses the visual inspection method to complete the statement of cash flows. Additional information is listed below:

The net cash provided by operating activities was

Question

Angel Heating Co. reported $27,000 of net income. The company uses the visual inspection method to complete the statement of cash flows. Additional information is listed below:

The net cash provided by operating activities was

Quizplus · Accepted Answer

To determine the net cash provided by operating activities, we need to adjust net income for non-cash expenses and changes in current assets and liabilities. Since the visual inspection method is used, we cannot determine the specific amounts of each adjustment, but we can make an estimated adjustment of $100 in accrued expenses payable.

Adjusted net income = $27,000 + $100 (increase in accrued expenses payable) = $27,100

Therefore, the net cash provided by operating activities is estimated to be $27,100. The closest answer choice is B.