A company had net income of $242,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and $14,000, respectively. There was also a loss on the sale of equipment of $17,000. How much cash was provided by operating activities?
A) $218,000.
B) $201,000.
C) $278,000.
D) $299,000.

Question

Quizplus · Accepted Answer

Net income + Depreciation expense + Increase in accounts receivable + Increase in inventory - Decrease in prepaid expenses - Decrease in accounts payable - Loss on sale of equipment = Cash provided by operating activities$242,000 + $26,000 + $15,000 + $40,000 - $2,000 - $14,000 - $17,000 = $218,000

A Company Had Net Income of $242,000