Napier, Inc. reported net income of $235,000 for the year ended 12/31/15. Includ

Question

Napier, Inc. reported net income of $235,000 for the year ended 12/31/15. Included in the computation of net income were: depreciation expense, $35,000; amortization expense, $20,000; income from an investment in common stock of XYZ Corp (accounted for under the equity method), $25,000; and amortization of a bond premium, $4,000. During the year Napier, Inc. paid a $50,000 dividend. The net cash provided by operating activities should be reported at

Select one:

A. $159,000

B. $209,000

C. $211,000

D. $261,000

Explanation / Answer

Net cash provided by operating activities should be reported at $261,000 which is calculated as below:- Cash flow by operating activities Net income        235,000 Adjustments to reconcile net income to net cash provided by operations Depreciation expense          35,000 Amortization expense          20,000 Income from an investment in common stock of XYZ Corp        (25,000) Amortization of a bond premium,          (4,000) Cash flow by operating activities        261,000

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