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3 June, 11:40

Krauss Company's income statement for the year ended December 31, 2017, contained the following condensed information.

Service revenue $845,540

Operating expenses (excluding depreciation). $625,700

Depreciation expense 57,390

Loss on sale of equipment 29,170 712,260

Income before income taxes 133,280

Income tax expense 40,190

Net income $93,090

Krauss's balance sheet contained the following comparative data at December 31.

2017 2016

Accounts receivable $36,010 $59,510

Accounts payable 45,780 31,020

Income taxes payable 4,070 8,680

(Accounts payable pertains to operating expenses.)

Using the direct method, what is the Net Cash provided by Operating Activities?

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  1. 3 June, 11:52
    0
    Net Cash provided by Operating Activities 146,000

    Explanation:

    using the income statement values and the balance sheet beginning and ending we can solve for the cash collection and disbursements:

    beginning

    + net income figure:

    total amount to collect/pay

    less ending

    actually paid/collected

    collected from customer:

    36,010 + 845,540 - 59,510 = 822,040

    payment of expenses:

    45,780 + 625,700 - 31,020 = 640,460‬

    tax paid:

    4,070 + 40,190 - 8,680 = 35,580‬

    cash from operation

    822,040 - 640,460 - 35,580 = 146,000
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