A company's income statement showed the following: net income, $132,000; depreciation expense, $39,000; and gain on sale of plant assets, $13,000. An examination of the company's current assets and current liabilities showed the following changes accounts receivable decreased $11,200; merchandise inventory increased $27,000; prepaid expenses increased $8000; accounts payable increased $5200. Calculate the net cash provided or used by operating activities.
Answer
--Requirement, with working
Net Income | $132,000 | |
Adjustments: | ||
Depreciation expense | $39,000 | |
Gain on sale of plant assets | ($13,000) | |
Decreased in accounts receivables | $11,200 | |
Increase in inventory | ($27,000) | |
Increase in prepaid expense | ($8,000) | |
Increase in accounts payable | $5,200 | |
Net Cash provided (used by) operating activities | $139,400 | Answer |
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No. | Conceptual Notes |
1 | Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time. |
2 | Effects of Non - Cash Transaction are adjusted from Net Income. |
3 | Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement. |
4 | Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income |
5 | Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income |
A company's income statement showed the following: net income, $132,000; depreciation expense, $39,000; and gain on...
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