Reference no: EM132189619
Question - For the year Ended December 31, 2011
Sales $4,200,000
Cost of Sales 3.576,000
Gross Profit 624,000
Selling Expenses $300,000
Administrative expenses 96,000 396,000
Income from Operations 228,000
Interest Expense 36,000
Income before taxes 192,000
Income taxes 48,000
Net Income $144,000
Dividends for the year 20111 were $96,000.
During the year, equipment was sold for $120,000. This equipment cost $176,000 originally and hada book value of $144,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
All depreciation expense is in the selling expense category.
Direct method
The net cash provided by operating activities is
a. $204,000
b. $144,000
c. $120,000
d. $100,000