Questions 9-10(of 17) The folowing information applies to the questions displaye

Question

Questions 9-10(of 17) The folowing information applies to the questions displayed below A recent annual report for BubbliCo contained the fellowing information for the period (dolars in millions $ 5150 Deprecietion and amortization ecelvable ease in accounts Increase in Inventory Incresse in prepald expense Increase in accounts payable Decrease in taxes paysble Incresse in other current labilities 2.555 Cash dividends pa Treesury stock purchased Required information 9. Required: cash fows from operating activities for BubbliCo using the indirect method. (Enter your answer in decimals, not in percentages, rounded to 2 decimal places. List cash outfiows as negative amounts) Cash fows from operating activities

Explanation / Answer

note:

depreciation and amortization is non cash expenditure and will be added back to arrive at cash flow from operating activities.

increase in current assets will result in a reduction from cash from operating activities and vice versa.

increase in current liabilities will result in an addition to cash from operating activities and vice versa.

Cash flow from operating activities

Cash flow from operating activities

Net income $5,150 adjustments to reconcile net income to cash flow from operating activities Add: amortisation and depreciation 1,550 less: increase in accounts receivable (566) less: increase in inventory (352) less: increase in prepaid expense (87) add: increase in accounts payable 725 less: decrease in taxes payable (194) Increase in other current liabilities 750 cash dividends paid (financing activity) NA treasury stock purchased (financing acitivity) NA Cash flow from operating activities $6,976

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