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Oriole Company reported net income of $62000 for the year. During the year, accounts receivable...

Question:

Oriole Company reported net income of $62000 for the year. During the year, accounts receivable decreased by $7600, accounts payable increased by $4000 and depreciation expense of $5100 was recorded. Net cash provided by operating activities for the year is?

Operating Cash Flow:

The net cash provided by operating activities is calculated in the first part of the cash flow statement and it represents the cash that was generated from trading by the company in the reporting period.

Answer and Explanation:


Net income $62,000
Add (deduct) noncash effects on operating income
Depreciation expense $5,100
Decrease in accounts receivable $7,600 A decrease should be added because it implies that cash was collected from customers
Increase in accounts payable $4,000 An increase will be added as it implies that cash was generated from supplier credit
Net cash provided by operating activities $78,700

Learn more about this topic:

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Operating Cash Flow: Definition & Examples

from Finance 101: Principles of Finance

Chapter 10 / Lesson 4
9.9K

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