Gibson Company recorded the following cash transactions for the year: Paid $180,000 for salaries.
Paid $80,000 to purchase office equipment.
Paid $20,000 for utilities.
Paid $8,000 in dividends.
Collected $310,000 from customers.
What was Gibson's net cash provided by operating activities?
A) $110,000
B) $30,000
C) $130,000
D) $102,000

Question

Quizplus · Accepted Answer

Net cash provided by operating activities is calculated as cash collected from customers minus cash paid for operating expenses (salaries and utilities). So, $310,000 - $180,000 - $20,000 = $110,000. The purchase of office equipment and dividends are not included in operating activities.

Gibson Company Recorded the Following Cash Transactions for the Year