The accounting records of Miller Company provided the data below ($ in 000s).
What is the net cash provided (used) by operating activities?
A)$20,600
B)$27,600
C)$3,800
D)($27,600)
E)$41,800

Question

The accounting records of Miller Company provided the data below ($ in 000s). 
What is the net cash provided (used) by operating activities?
A)$20,600 
B)$27,600 
C)$3,800 
D)($27,600) 
E)$41,800

Quizplus · Accepted Answer

To calculate the net cash provided (used) by operating activities, we need to start with net income and adjust for non-cash items and changes in working capital. 
Net Income: $80,000
Adjustments: 
Depreciation Expense: $18,000
Gain on sale of equipment: ($5,000)
Increase in Accounts Receivable: ($15,000)
Decrease in Inventory: $10,000
Increase in Accounts Payable: $11,000
Net cash provided by operating activities: 
$80,000 + $18,000 - $5,000 - $15,000 + $10,000 + $11,000 = $27,000 
Therefore, the correct answer is B, $27,600.

The Accounting Records of Miller Company Provided the Data Below