[CPApracticer]

The answer is B. 40,000, but why. I did -20+10-50-40+30= -70. Can someone please provide an explanation, especially with equipment gain on sale and depreciation. Not sure how to account for those two.

2. Martin Co. had net income of $70,000 during the year. Depreciation

expense was $10,000. The following information is available:

Accounts receivable increase $20,000

Equipment gain on sale

increase 10,000

Nontrade notes payable

increase 50,000

Prepaid insurance increase 40,000

Accounts payable increase 30,000

What amount should Martin report as net cash provided by operating

activities in its statement of cash flows for the year?

$0

$ 40,000

$ 50,000

$100,000

F: 54 (4/13) 60 (4/14) 67 (9/14) 66 (10/14) 63 (11/15) 79 (2/16) PASSED
A: 60 (5/13) 80 (4/16) PASSED
R: 60 (7/13) 61 (2/15) 70 (4/15) 77 (7/15) PASSED
B: (6/16)