14. During the year, The Train Stop decreased its accounts receiva$20. For incre

Question

14. During the year, The Train Stop decreased its accounts receiva$20. For increased its inventory by $130, and decreased its accountaie these three accounts, the firm has a net: a. $90 use of cash. b. $50 use of cash. c. $170 use of cash. d. $90 source of cash. e. $50 source of cash. vable by $60, $58 and 15. A firm generated net income of $624. The depreciation expense was dividends were paid in the amount of $72. Accounts payables decreased by $28, accounts receivables increased by $16, inventory increased by $41, and net fixed assets increased by $28. What was the net cash flow from operating activity? a. $497 b. $553 c. $597 d. $608 e. $641 Waxham's Feed Mill 2007 Income Statement $21,407 16.829 324 3.254 Net sales Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes Less: Interest paid Taxable Income Less: Taxes Net income $ 2,327 814 S 1513

Explanation / Answer

14.$90 use of cash .

15.C.$597

The following is the calculation of operating cash flows:

note: dividends paid are cash flow from financing activities.

net increase in fixed cash flows is an investing activity.

Decrease in accounts receivable is a source of cash $60 increase in inventory is a use of cash ($130) Decrease in accounts payable is use of cash ($20) net use of cash $90

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