The following data are available for Springer Corporation. Net cash provided by operating activities is:
A) ₤290,000.
B) ₤380,000.
C) ₤410,000.
D) ₤470,000.

Question

The following data are available for Springer Corporation.  Net cash provided by operating activities is:
A) ₤290,000. 
B) ₤380,000. 
C) ₤410,000. 
D) ₤470,000.

Quizplus · Accepted Answer

The net cash provided by operating activities is calculated as the sum of operating cash inflows minus operating cash outflows. In this case, operating cash inflows are ₤820,000 (sales revenue ₤840,000 minus decrease in accounts receivable ₤20,000), and operating cash outflows are ₤440,000 (cost of goods sold ₤400,000 plus increase in accounts payable ₤40,000). Therefore, the net cash provided by operating activities is ₤820,000 minus ₤440,000, which equals ₤380,000.

The Following Data Are Available for Springer Corporation