Question

In 2013, Salvage Yard Inc. had cash flows from investing activities of ($250,000) and cash flows from financing activities of ($150,000). The balance in the firm's cash account was $90,000 at the beginning of 2013 and $105,000 at the end of the year. What was Salvage Yard Inc.'s cash flow from operations for 2013?

Answer 1

Cash flows from operation activities : $505.000

Step-by-step explanation:

The equation says:

Cash flows from operation activities + cash flows from investing activities + cash flows from financing activities = Cash account

Let's replace in the equation:

Cash flows from operation activities – 250.000 – 150.000 = 105.000

Cash flows from operation activities = 105.000 + 250.000 + 150.000

Cash flows from operation activities = 505.000

Answer 2

$415,000

Step-by-step explanation:

Following is the formula for cash flow:

Ending Cash Balance = CFO + CFI + CFF + Beginning Cash Balance

CFO = Cash flow from operating activities

CFI = Cash flow from investing activities

CFF = Cash flow from financing activities

We can easily rearrange the formula to find CFO

Ending Cash Balance - CFI - CFF - Beginning Cash Balance = CFO

or

CFO = Ending Cash Balance - CFI - CFF - Beginning Cash Balance

Solution

`CFO=105000-(-250000)-(-150000)-90000`

CFO = $415,000