Craig Rusch Corporation reports the following information: $$\begin{array} { l r }
\text { Net income } & \$ 500,000 \
\text { Depreciation expense } & 140,000 \
\text { Increase in accounts receivable } & 60,000
\end{array}$$ Rusch should report cash provided by operating activities of
A)$300,000.
B)$420,000.
C)$580,000.
D)$700,000.

Question

Craig Rusch Corporation reports the following information: $$\begin{array} { l r } 
\text { Net income } & \$ 500,000 \
\text { Depreciation expense } & 140,000 \
\text { Increase in accounts receivable } & 60,000
\end{array}$$ Rusch should report cash provided by operating activities of
A)$300,000.
B)$420,000.
C)$580,000.
D)$700,000.

Quizplus · Accepted Answer

Cash provided by operating activities is calculated by adjusting net income for non-cash expenses and changes in working capital. Start with net income ($500,000), add back depreciation ($140,000), and subtract the increase in accounts receivable ($60,000): $500,000 + $140,000 - $60,000 = $580,000.

Craig Rusch Corporation Reports the Following Information Rusch Should Report Cash Provided by Operating Activities of A)$300,000

Craig Rusch Corporation Reports the Following Information Rusch Should Report Cash Provided by Operating Activities of
A)$300,000