Practice Quiz

Case Interview Prep

Category - Accounting

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Cartman’s Cats had $35,000 in net income last year. They also showed $5,000 in depreciation. On December 24th, they received $20,000 for rent payment for the new Pet Mall they opened last year, where pet owners can shop with their pets. How much will they show under the operating activities on their statement of cash flows?
  1. $35,000
  2. $45,000
  3. $60,000
  4. $50,000
  5. $10,000
Explanation
Answer - C - They will show $60,000 under the operating activities on their statement of cash flows.

Key Takeaway: The depreciation expense is added to the net income, as is the $20,000 for the rent payment on the statement of cash flows.
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