Question

Cambridge Corporation just completed its fiscal year ended February 28, 2021. The accounts receivable balance was $50,000 at the beginning of the year and $45,000 at the end of the year. Accounts payable was $22,000 at the beginning of the year and $54,000 at the end of the year. Depreciation expense totaled $55,000 and dividends of $50,000 were paid during the year. Net income was $110,000. What is the amount of cash provided by operating activities?

Answer 1

The amount of Net cash provided by operating activities is $138,000.

Here, we will calculate the Operating activities type of cash flow using the information provided therewith.

Particulars                                                               Amount

Net income                                                             $110,000

Add: Depreciation expense                                  $55,000

Add: Decrease in AR (50000-45000)                  $5,000

Less: Decrease in AP(54000-22000)                   $32,000

Net cash provided by operating activities          $138,000

Therefore, the amount of cash provided by operating activities is $138,000.

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