Hi-Tech, Inc., reports net income of $66.0 million. Included in that number are depreciation expense of $5.6 million and a loss on the sale of equipment of $1.6 million. Records reveal increases in accounts receivable, accounts payable, and inventory of $2.6 million, $3.6 million, and $4.6 million, respectively. What are Hi-Tech's net cash flows from operating activities? (List cash outflows and any decrease in cash as negative amounts. Round your answers to 1 decimal place. Enter your answers in millions (i. e., $10,100,000 should be entered as 10.1).)

Question

Business

Margaret Rios

20 September, 11:18

Hi-Tech, Inc., reports net income of $66.0 million. Included in that number are depreciation expense of $5.6 million and a loss on the sale of equipment of $1.6 million. Records reveal increases in accounts receivable, accounts payable, and inventory of $2.6 million, $3.6 million, and $4.6 million, respectively. What are Hi-Tech's net cash flows from operating activities? (List cash outflows and any decrease in cash as negative amounts. Round your answers to 1 decimal place. Enter your answers in millions (i. e., $10,100,000 should be entered as 10.1).)

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Answers (2)

Know the Answer?

Jessie Mooney · Answer 1

Hi-Tech's net cash flows from operating activities is $69.6 million

Explanation:

Prepare the Cash Flow from Operating Activities Section Using the Indirect method as follows:

Cash Flow from Operating Activities

Net income $66.0 million

Adjustment of Non-cash items:

depreciation $5.6 million

loss on the sale of equipment $1.6 million

Adjustment of Working Capital Items:

Increase in accounts receivable ($2.6 million)

Increase in accounts payable $3.6 million

Increase in accounts inventory ($4.6 million)

Net Cash Flow from Operating Activities $69.6 million

Seth Frank · Answer 2

Net cash flows from operating activities$69.6

Explanation:

Hi-Tech, Inc

Cash Flows from Operating Activities

Net income $66

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation expense 5.6

Loss (on sale of equipment) 1.6

Increase in accounts receivable (2.6)

Increase in inventory (4.6)

Increase in accounts payable 3.6

Net cash flows from operating activities$69.6

Therefore Hi-Tech's net cash flows from operating activities will be $69.6