The most recent balance sheet and income statement of Dallavalle Corporation appear below: Cash dividends were $12.The company did not retire or sell any property,plant,and equipment during the year.The net cash provided by (used in)operating activities for the year was:
A)$77
B)$68
C)$40
D)$14

Question

The most recent balance sheet and income statement of Dallavalle Corporation appear below:   Cash dividends were $12.The company did not retire or sell any property,plant,and equipment during the year.The net cash provided by (used in)operating activities for the year was:
A)$77 
B)$68 
C)$40 
D)$14

Quizplus · Accepted Answer

The net cash provided by operating activities can be calculated using the indirect method by adjusting the net income for non-cash expenses and changes in current assets and current liabilities.

Starting with net income of $105, we add back depreciation expense of $44, decrease in accounts receivable of $6, increase in inventory of $11, increase in accounts payable of $10, and increase in accrued expenses of $9. This gives us a net cash provided by operating activities of $183.

However, we need to subtract the cash dividends paid of $12 to get the final answer of $171.

Therefore, the correct choice is B, $68.

The Most Recent Balance Sheet and Income Statement of Dallavalle