Click here to read the eBook: Statement of Cash Flows STATEMENT OF CASH FLOWS Ha

Question

Click here to read the eBook: Statement of Cash Flows STATEMENT OF CASH FLOWS Hampton industries had $53,000 in cash at year-end 2015 and $26,000 in cash at year-end 2016. The firm invested in property, plant, and equipment totaling $210,000. Cash flow from financing activities totaled +$190,000. Round your answers to the nearest dollar, if necessary a. What was the cash flow from operating activities? Enter cash outflows with a minus sign. b. If accruals increased by $35,000, receivables and inventories increased by $110,000, and depreciation and amortization totaled $23,000, what was the firm's net income?

Explanation / Answer

Requirement a. Change in Cash (26000-53000) -27000 Less: Cash flow from financing activities -190000 Add: invested in property, plant and equipment 210000 Cash flows from operating activities -7000 Requirement b. Cash flows from operating activities -7000 Less: Increase in accrual -35000 Add:Increase in Receivables and inventories 110000 Less: Depreciation and amortization -23000 Firms net income 45000

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