Question

Kentucky Company uses the indirect method to prepare the statement of cash flows. Refer to the following income​ statement:

Kentucky Company Income Statement Year Ended December​ 31, 2019
Sales Revenue	​$249,000
Interest Revenue	​2,300
Gain on Sale of Plant Assets	​5,300
Total Revenues and Gains		​$256,600
Cost of Goods Sold	​124,000
Salary Expense	​43,000
Depreciation Expense	​14,000
Other Operating Expenses	​20,000
Interest Expense	​1,600
Income Tax Expense	​5,100
Total Expenses		​207,700
Net Income​ (Loss)		​$48,900

Additional information provided by the company includes the​ following:

1. Current​ assets, other than​ cash, increased by​ $21,000.

2. Current liabilities decreased by​ $1,200.

Compute the net cash provided by​ (used for) operating activities.

A.

​$35,400

B.

​$11,800

C.

​$26,700

D.

​$40,700

Answer 1

Kentucky Company
Statement of Cash Flows (Partial)
For the Year Ended December 31, 2019
Cash flow from Operating Activities
Net income	48,900
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	14,000
Gain on sale of plant assets	-5,300
Changes in current operating assets and liabilities:
Current assets increased	-21,000
Current liabilities decreased	-1,200
Net cash provided by Operating Activities		$35,400

the net cash provided by​ operating activities= $35,400

Correct option is A.

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