Carriveau Corporation's most recent balance sheet appears below: Net income for the year was $172. Cash dividends were $35. The company did not sell or retire any property, plant, and equipment during the year. The net cash provided by (used in) operating activities for the year was:
A)$183
B)$246
C)($11)
D)$161

Question

Carriveau Corporation's most recent balance sheet appears below:  Net income for the year was $172. Cash dividends were $35. The company did not sell or retire any property, plant, and equipment during the year. The net cash provided by (used in) operating activities for the year was:
A)$183 
B)$246 
C)($11) 
D)$161

Quizplus · Accepted Answer

To calculate net cash provided by operating activities, we start with net income ($172) and then add back any non-cash expenses (there are none mentioned in the problem) and subtract any increases in current assets (accounts receivable and inventory) and add any decreases in current liabilities (accounts payable). Looking at the balance sheet, accounts receivable increased by $10 and inventory increased by $10, for a total increase in current assets of $20. Accounts payable increased by $11, so there was a decrease in current liabilities of $11. Therefore, the net cash provided by operating activities is:
$172 (net income) - $20 (increase in current assets) + $11 (decrease in current liabilities) = $161. Thus, the correct answer is D.

Carriveau Corporation's Most Recent Balance Sheet Appears Below: Net