Question

Assuming Net Income for the year is $250,000, what is the cash flows from operating activity given in the following information:

Increase in Salaries Payable $17,500
Depreciation Expense $7,500
Increase in Prepaid Rent $26,500
Loss on sale of asset $1,150
Increase in Accounts Payable $29,000
Increase in Inventory $76,000

Answer 1

Answer: $202,650

Step-by-step explanation:

Given that,

Net Income for the year = $250,000

Increase in Salaries Payable = $17,500

Depreciation Expense = $7,500

Increase in Prepaid Rent = $26,500

Loss on sale of asset = $1,150

Increase in Accounts Payable = $29,000

Increase in Inventory = $76,000

Cash flows from operating activity:

= Net Income + Salaries Payable + Depreciation Expense - Prepaid Rent + Loss on sale of asset + Accounts Payable - Inventory

= $250,000 + $17,500 + $7,500 - $26,500 + $1,150 + $29,000 - $76,000

= $202,650