Mayweather reports net income of $305,000 for the year ended December 31.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,a $75,000 increase in equipment,and a $100,000 decrease in notes payable.Calculate the net increase in cash for the year.
A)$216,400.
B)$281,400.
C)$381,400.
D)$206,400.
E)$406,400.

Question

Quizplus · Accepted Answer

To calculate the net increase in cash, we need to use the following formula:

Net Income + Depreciation Expense - Loss on Sale of Equipment + Decrease in Accounts Receivable - Decrease in Prepaid Expenses - Increase in Accounts Payable + Increase in Wages Payable - Increase in Equipment - Decrease in Notes Payable

Plugging in the given numbers, we get:

$305,000 + $93,700 - $10,000 + (-$40,200) - (-$10,200) + $15,200 - (-$12,500) - $75,000 - (-$100,000) = $206,400

Therefore, the net increase in cash for the year is $206,400. The correct answer is D.

Mayweather Reports Net Income of $305,000 for the Year Ended