Answer:
cash provided by operating activities 105
Explanation:
We will use the indirect method.
First, we calculate the net income.
sales 230
COGS (78)
depreciation (40)
interest expense (12)
EBT 100
tax rate 35%
tax expense (35)
net income 65
Now, we adjust the income by removing the non-monetary term
cash flow from operating activities:
net income 65
adjustment to net income
non-monetary term
depreciation expense 40 (A)
adjusted net income 105
cash provided by operating activities 105
Notes:
(A) The depreciation expense is an acconting metric, it is used in accounting it does not represent a cash outflow, so it is removed from their effect on net income
