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Determine amount of cash generated by operating activities

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Problem 1: The Hamster Company uses the indirect method to determine its cash flows from operating activities. Hamster reported net income of $400,000 for the year. Depreciation expense is $60,000 and gain on sale of equipment is $20,000. During the year, accounts receivable went up by $2,000 and accounts payable fell by $7,000. Determine the amount of cash generated by operating activities?

a. $449,000

b. $435,000

c. $445,000

d. $431,000

e. $400,000

Reference no: EM132796904

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