Pare Company reported a net loss of $30,000 for the year ended December 31, 2017. During the year, accounts receivable decreased $15,000, inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded. During 2017, operating activities
A) used net cash of $10,000.
B) used net cash of $25,000.
C) provided net cash of $10,000.
D) provided net cash of $25,000.

Question

Quizplus · Accepted Answer

The net loss of $30,000 is adjusted by adding back non-cash depreciation expense of $20,000, adding the decrease in accounts receivable of $15,000, and adding the increase in accounts payable of $30,000, while subtracting the increase in inventory of $25,000. This results in a net cash provided by operating activities of $10,000.

Pare Company Reported a Net Loss of $30,000 for the Year