Question Given the following selected information on Cicalese’s Chocolate, Inc.,
ID: 2709023 • Letter: Q
Question
Question
Given the following selected information on Cicalese’s Chocolate, Inc., calculateCash Flow from Operating Activities for the year 20X1.
Dec 31, 20X0
Dec 31, 20X1
EAT
$ 600,000
$ 800,000
Depreciation Exp.
100,000
140,000
Dividends
400,000
550,000
Accounts Receivable
1,500,000
2,000,000
Inventory
3,500,000
2,000,000
Accts. Payable/Accr.
350,000
500,000
Long-Term Debt
2,300,000
3,000,000
Common Stock
2,200,000
2,500,000
Retained Earnings
6,150,000
6,350,000
Dec 31, 20X0
Dec 31, 20X1
EAT
$ 600,000
$ 800,000
Depreciation Exp.
100,000
140,000
Dividends
400,000
550,000
Accounts Receivable
1,500,000
2,000,000
Inventory
3,500,000
2,000,000
Accts. Payable/Accr.
350,000
500,000
Long-Term Debt
2,300,000
3,000,000
Common Stock
2,200,000
2,500,000
Retained Earnings
6,150,000
6,350,000
Explanation / Answer
Operating Cash flow for the year 20X1 is given by
Net Income + Deprication + decrese in current assets (or - increase in current assets) + Increase in Current liabilties ( or - decrease in current liabilties)
Net Income = 800,000
Depriciation = 140,000
Increase in Acct.Receivable(Current Asset) = -500,000
Decrease in Inv.(Curent Aseet) +1,500,000
Increase in Acct. Payable(Current Liability) = 150,000
Hence Operating Cash flow is
800,000 + 140,000 - 500,000 +1,500,000 + 150,000 = $2,090,000
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