Use the following information about the current year's operations of a company to calculate cash provided by operations.
A)$218,000.
B)$232,000.
C)$230,000.
D)$186,000.
E)$198,000.

Question

Use the following information about the current year's operations of a company to calculate cash provided by operations. 
A)$218,000. 
B)$232,000. 
C)$230,000. 
D)$186,000. 
E)$198,000.

Quizplus · Accepted Answer

To calculate the cash provided by operations, we start with net income of $300,000 and add back depreciation of $60,000 (since it is a non-cash expense). We then subtract the increase in accounts receivable of $32,000 and add the decrease in inventory of $30,000 (since both are changes in working capital). This gives us a cash provided by operations of $230,000.

Use the Following Information About the Current Year's Operations of a Company