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JKCPA
JKCPA , CPA
Category: Finance
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Experience:  Bachelors degree and CPA with Accounting experience.
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W. C. Cycling had $55,000 in cash at year-end 2007 and $25,000

Resolved Question:

W. C. Cycling had $55,000 in cash at year-end 2007 and $25,000 in cash at year end 2008. Cash flow from long-term investing activities totaled -$250,000, and cash flow from financing activities totaled + $170,000.

A) What was the cash flow from operating activities?
B) If accruals increased by $25,000, receivables and inventories increased by $100,000, and depreciation and amortization totaled $10,000, what was the firm’s net income?
Submitted: 6 years ago.
Category: Finance
Expert:  JKCPA replied 6 years ago.

Hello,

 

Thanks for your question.

 

A) $25,000-$55,000 = -$30,000 total cash flow for 2008.

Cash flow from investing= -$250,000

Cash flow from financing= $170,000

Cash flow from operating = x

-250,000 + 170,000 + x = -30,000

80,000 + x = -30,000

x= -30,000 - 80,000

x= -$110,000 = cash flow from operating activities

 

B) cash flow from operating activities = -$110,000

less depreciation -10,000

plus increase in receivables $100,000

plus increase in accruals $25,000

net income = $5,000

 

Hope this helps,

Best regards

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