The most recent balance sheet and income statement of Dallavalle Corporation appear below: Cash dividends were $12.The company did not retire or sell any property, plant, and equipment during the year.The net cash provided by (used in) operating activities for the year was:

A) $77
B) $68
C) $40
D) $14

Question

The most recent balance sheet and income statement of Dallavalle Corporation appear below:

Cash dividends were $12.The company did not retire or sell any property, plant, and equipment during the year.The net cash provided by (used in) operating activities for the year was:

A) $77
B) $68
C) $40
D) $14

Andrew Peele · Accepted Answer

Final Answer : B, Explanation :  To calculate net cash provided by operating activities, we need to adjust net income for non-cash items and changes in working capital.From the income statement, we can see that the company had a net income of $55.From the balance sheet, we can see that accounts receivable decreased by $10, prepaid expenses increased by $2, accounts payable increased by $18, and accrued liabilities decreased by $1.To calculate net cash provided by operating activities:Net income ($55)Add: Depreciation expense $20)Add: Increase in prepaid expenses $2)Subtract: Decrease in accounts receivable ($10)Subtract: Increase in accounts payable ($18)Add: Decrease in accrued liabilities $1)Net cash provided by operating activities = $68Therefore, the correct choice is B.

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The most recent balance sheet and income statement of Dallavalle Corporation appear below: Cash dividends were $12.The company did not retire or sell any property, plant, and equipment during the year.The net cash provided by (used in) operating activities for the year was:A) $77B) $68C) $40D) $14

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