Question

Allen Company's 2019 income statement reported total revenues, $810,000 and total expenses (including $36,000 depreciation) of $680,000. The company’s accounting records showed the following: accounts receivable—beginning balance, $46,000 and ending balance, $36,400; accounts payable—beginning balance, $18,000 and ending balance, $24,400. Therefore, based only on this information, how much was the 2019 net cash provided by operating activities?

Answer 1

Answer:

$162,800

Explanation:

We can prepare the Operating Activities Section of the the Cash Flow Statement to determine the net cash provided by operating activities.

Cash Flow from Operating Activities

Net Income ($810,000 - $680,000)                                  $130,000

Add back depreciation                                                        $30,000

Adjust for changes in Working Capital :

Decrease in Accounts Receivable                                      ($9,600)

Increase in Accounts Payable                                               $6,400

Net cash provided by operating activities                        $162,800