If Beverly Company has net income of 50 changes in current a

If Beverly Company has net income of 50, changes in current asset and liability accounts of 10 and cash provided by d operations of 100. then depreciation is 0 Select one: O a. 20 o b. 40 O c. 60 o d. 80

Solution

Answer is b. 40

The explanation is as follows:

The Cash provided by the operations:             $ 100

Less: Net income earned:                                $50

Less: Changes in Current assets and laibility: $10

Amount of depreciation charged:                     $40

In other words, the cash provided from operations is the sum of total of net income earned, changes in current assets and liabilities (positive) and depreciation expense.