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Sheffield Corp
Sheffield Corp. reported net income of $60000 for the year ended December 31, 2021 Included in net income were depreciation expense of $8400 and a gain on sale of equipment of $2100. Each of the following accounts increased during 2021:
Accounts receivable $2600 Inventory $4100 Prepaid rent $6700 Available-for-sale securities $1800 Accounts payable $5000
What is the amount of cash provided by operating activities for Sheffield Corp. for the year ended December 31, 2021?
$57900 $56100 $48300 $60000
Expert Solution
Computation of Amount of Cash Provided by Operating Activities for Sheffield Corporation for the Year Ended December 31, 2021:
Net Income = $60,000
Add: Depreciation Expenses = $8,400
Less: Gain on Sale of Equipment = $2,100
Less: Increase in Accounts Receivables = $2,600
Less: Increase in Inventory = $4,100
Less: Increase in Prepaid Rent = $6,700
Add: Increase in Accounts Payable = $5,000
Amount of Cash Provided by Operating Activities = $57,900
The correct option is 1st "$57,900".
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