Question

UJ Corp. reported net income for the year of $115,000. What is the net cash flows from operating activities given the following information:

Increase in Salaries Payable $15,000
Depreciation Expense $6,000
Increase in Prepaid Rent $24,000
Gain on sale of asset $1,000
Decrease in Accounts Payable $25,000
Decrease in Inventory $50,000

Answer 1

$88,000

Step-by-step explanation:

Calculation for the net operating cash flows

NET CASH FLOW FROM OPERATING ACTIVITIES

Net Income $115,000

The Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation Expense $6,000

Gain on sale of asset $1,000

Increase in Salaries Payable $15,000

Less Increase in Prepaid Rent ($24,000)

Increase in Accounts Payable $25,000

Less Increase in Inventory ($50,000)

Net Operating Cash Flows $88,000

Therefore the net operating cash flows is $88,000