Question

he financial statements of Simon Co. include the following items (amounts in thousands): Income Statement For the Year Ended December 31, 2017 Net income $ 840 Depreciation and amortization expense 640 At December 31 Balance Sheets 2017 2016 Accounts receivable $ 250 $ 340 Inventory 340 300 Accounts payable 160 180 Income taxes payable 100 30 Required: Calculate the net cash flow provided (used) by operations for Simon Co. for the year ended December 31, 2017. (Enter your answer in thousands. (i.e., 20,000 should be entered as 20))

Answer 1

$1,580

Step-by-step explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $840

Adjustment made:

Add : Depreciation and amortization expense $640

Add: Decrease in accounts receivable $90 ($250 - $300)

Less: Increase in inventory -$40 ($340 - $300)

Less: Decrease in accounts payable -$20 ($160 - $180)

Add: Increase in income tax payable $70 ($100 - $70)

Total of Adjustments $740

Net Cash flow from Operating activities $1,580