Question

Bird Brain Co. reported net income of $46,500 for the year ended December 31, 2021. January 1 balances in accounts receivable and accounts payable were $23,000 and $24,500 respectively. Year-end balances in these accounts were $21,000 and $29,800, respectively. Assuming that all relevant information has been presented, Bird Brain's cash flows from operating activities would be: Multiple Choice $46,500. $39,200. $53,800. $49,800.

Answer 1

$53,800

Step-by-step explanation:

Cash flow from operating activities = Net income + ( Beginning accounts receivable - Ending accounts receivable) + ( Ending accounts payable - Beginning accounts payable)

= $46,500 + ($23,000 - $21,000) + ($29,800 - $24,500)

= $46,500 + $2,000 + $5,300

= $53,800

Therefore, Bird's brain cash flow from operating activities is $53,800