A company has Net Income of $10, which included $2 of depreciation expense. Ther

ID: 2464622 • Letter: A

Question

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?

Explanation / Answer

Statement of Cash Flows

For the Year Ending

Year

Cash Flows from Operating Activities

Net Income

$10

Add Expenses Not Requiring Cash:

Depreciation

Other Adjustments:

Subtract increase in Accounts Receivable

Subtract Decrease in Accounts Payable

-10

Subtract Increase in Inventory

-5

Net Cash from Operating Activities