A company\'s income statement showed the following: net income, $135,000; deprec

Question

A company's income statement showed the following: net income, $135,000; depreciation expense, $35,500; and gain on sale of plant assets, $19,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $10,500; merchandise inventory increased $23,500; prepaid expenses decreased $7,300; accounts payable increased $4,500. Calculate the net cash provided or used by operating activities.

Explanation / Answer

net cash flow from operating Activity $

Net Income as per Incoem Statement= 135000

Add: Depreciation ( Non Cash) = 35500

Less: Profit on sale of plant assets = 19500

151000

Change in working capital

account receivable decrease = 10500

Inventory Increased = (23500)

Prepaid Expenses = 7300

account payable = 4500

Net Cash Flow from Operating Activity= 149800

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