Burgett Corporation's balance sheet and income statement appear below: Cash dividends were $41. The company sold equipment for $15 that was originally purchased for $4 and that had accumulated depreciation of $4.
-The net cash provided by (used by) operations for the year was:
A) $235
B) $171
C) $156
D) $197

Question

Burgett Corporation's balance sheet and income statement appear below:   Cash dividends were $41. The company sold equipment for $15 that was originally purchased for $4 and that had accumulated depreciation of $4.
-The net cash provided by (used by) operations for the year was:
A) $235 
B) $171 
C) $156 
D) $197

Quizplus · Accepted Answer

The net income from the income statement is $197 ($364 - $148 - $19), but we need to adjust for the gain on the sale of equipment and the decrease in accounts payable. The gain on the sale of equipment is $7 ($15 - $4 - $4), which is added back to net income, and the decrease in accounts payable is $48 ($480 - $432), which is subtracted from net income. 
So, the net cash provided by (used by) operations is: 
$197 (net income) + $41 (dividends) + $7 (gain on sale of equipment) - $48 (decrease in accounts payable) = $197 + $41 + $7 - $48 = $197. Therefore, the correct answer is (C) $156.

Burgett Corporation's Balance Sheet and Income Statement Appear Below