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16 August, 14:56

Hampton Industries had $49,000 in cash at year-end 2018 and $29,000 in cash at year-end 2019. The firm invested in property, plant, and equipment totaling $200,000 - the majority having a useful life greater than 20 years and falling under the alternative depreciation system. Cash flow from financing activities totaled + $190,000. Round your answers to the nearest dollar, if necessary. What was the cash flow from operating activities? Cash outflow, if any, should be indicated by a minus sign. $ If accruals increased by $30,000, receivables and inventories increased by $100,000, and depreciation and amortization totaled $5,000, what was the firm's net income? $

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  1. 16 August, 17:35
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    Cash flow from operating activities is $10,000

    Net income is $85,000

    Explanation:

    1. The computation of the cash flow from operating activities is shown below:

    We know that,

    Net change in cash = cash flow from operating activities + cash flow from investing activities + cash flow from financing activities

    ($29,000 - $49,000) = cash flow from operating activities - $200,000 + $190,000

    -$20,000 = cash flow from operating activities - $10,000

    So, cash flow from operating activities = $10,000

    2. The computation of the net income equals to

    Cash flow from operating activities = Net income + increased in accruals - increase in inventories and receivables + depreciation and amortization

    $10,000 = Net income + $30,000 - $100,000 + $5,000

    $10,000 = Net income - $75,000

    So, the net income = $85,000
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