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Question

? l ezto.mheducation.com/hm.tpx onnect instructions I hel M 1 CHAPTERS 1-2 ? |save& Exit! Submit Question 13 (of 20) value 5.00 points MC Qu. 9 Statement of Cash Flows Ann's Flowers Inc. reported 2008... Statement of Cash Flows Ann's Flowers Inc. reported 2008 net income of $1.30 milion and depreciation of $253,000. The top part Ann's Flowers, Inc's 2007 and 2008 balance sheets is listed below (in millions of dollars). urrent iebilities Current assets Cash and s and taxes $1.03 $1.03 5 530 Accounts payable 6.30 3.03 9.69 515 Notes payable 742 $13.75 $12.60 What is the 2008 net cash flow from operating activities for Ann's Flower's, Inc.? O -$1150,000o O $1373,000 O $2.673000 O $1,300.000 Multiple Choice MC Qu. 9 Statement of Difficulty 1 Basic Cash Flows Ann's Flowers Inc. reported 2008

Explanation / Answer

Correct Answer =$ 2673000.00

Calculation

Cash Flows from Operating Activities

Net Income

$ 1,300,000.00

Adjustments to reconcile Net Income to:

Increase in receivables

$ (1,150,000.00)

Decrease in Inventory

$ 1,150,000.00

Depreciation expense

$ 253,000.00

Increase in accounts payable

$ 1,120,000.00

$ 1,373,000.00

Net Cash Flows from operating activities

$ 2,673,000.00

Note 1) It is assumed that Notes Payable is a long term Liability and should be recorded as a Financing Activity.

If Notes payable are treated as Current liability then Operating cash flows would have been $ 403000.00. But Since Notes Payable is not Current liability the Value of Cash from Operation are $ 2673000.00