Question

A company's income statement showed the following: net income, $128,000; depreciation expense, $37,000; and gain on sale of plant assets, $11,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $10,800; merchandise inventory increased $25,000; prepaid expenses increased $7,600; accounts payable increased $4,800. Calculate the net cash provided or used by operating activities.

Answer 1

Net income	$    1,28,000.00
Add:Depreciation expense	$       37,000.00
Less:Gain on sale of plant assets	$      -11,000.00
Add:Decrease in AR	$       10,800.00
Less:increase in inventory	$      -25,000.00
Less:increase in prepaid expenses	$        -7,600.00
Add:increase in AP	$         4,800.00
Net cash flow from operating activities	$    1,37,000.00