A company has Net Income of $10, which included $2 of depreciation expense. There were no other noncash expenses in Net Income and there were no gains or losses. Accounts receivable was $20 at the beginning of the year and $25 at the end of the year. Accounts Payable was $15 at the beginning of the year and $5 at the end of the year. Inventory was $12 at the beginning of the year and $7 at the end of the year. All other balance sheet accounts were unchanged over the year. What was the company's Cash Flow from Operating Activities?

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Business

Karly Chan

20 December, 02:05

A company has Net Income of $10, which included $2 of depreciation expense. There were no other noncash expenses in Net Income and there were no gains or losses. Accounts receivable was $20 at the beginning of the year and $25 at the end of the year. Accounts Payable was $15 at the beginning of the year and $5 at the end of the year. Inventory was $12 at the beginning of the year and $7 at the end of the year. All other balance sheet accounts were unchanged over the year. What was the company's Cash Flow from Operating Activities?

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Adyson Ryan · Answer 1

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Explanation:

The company's cash flow from operating activities can be calculated as follows:

$

Net Income 10

Add:depreciation expense 2

Less:changes in accounts receivable (5)

(20-25)

Less:changes in accounts payable (10)

(5-15)

Add:changes in inventory 5

(12-7)

Cash flow from operating activities 2