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11 September, 18:32

Rachel's Recordings reported net income of $240,000. Beginning balances in Accounts Receivable and Accounts Payable were $17,000 and $22,000 respectively. Ending balances in these accounts were $11,500 and $30,000, respectively. Assuming that all relevant information has been presented, Rachel's net cash flows from operating activities would be:

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  1. 11 September, 20:18
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    Rachel's net cash flows from operating activities is $258,500

    Explanation:

    Rachel Cash flow from Operating activities

    Particulars Amount

    Net Income $240,000

    + Increase in Account Payable + $13,000

    (Ending balance - Beginning balance)

    30,000-17,000 = 13,000

    -Decrease in Account receivable + $5500

    (Ending balance - Beginning balance)

    11,500-17,000 = - 5500

    Cash flow from operating activities $258,500

    Therefore, the cash flow from operating activities is $258,500
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