Question

Based on the following information determine the Net Cash provided or used by operating activities.

Net Income – Rs 15,200

Depreciation Expense – Rs 10,000

Cash payment for accounts payable- 8,000

Gain on sale of land – 3,000

Increase in  inventory – 1,500

Increase in accounts payable – 2,850

Answer 1

Ans:

Cashflows from operating activities:

Net income	15,200
Adjustments:
+ Depreciation expenses	10,000
- Gain on sale of land	(3,000)
- Cash paid for accounts payable	(8,000)
Cash flows before changes in the working capital	14,200
+/- Changes in the working capital:
- Increase in inventory	(1,500)
+ Increase in accounts payable	2,850
Net cash flows from operating activities	15,550

Net cash provided by Operating activities is Rs.15,500.

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