Question

The net income for World Class Corporation was $140 million for the year ended December 31, 2021. Related information follows:

A. Amortization of patent, $1 million.
B. Cash dividends paid, $14 million.
C. Decrease in accounts receivable, $9 million.
D. Decrease in salaries payable, $1 million.
E. Depreciation expense, $20 million.
F. Increase in long-term notes payable, $13 million.
G. Sale of preferred stock for cash, $17 million.
H. Cash flows from operating activities during 2021 should be reported as:

Answer 1

$169 million

Step-by-step explanation:

To calculate the cash flow from operating activities we must start with the net income:

net income $140 million

plus patent amortization $1 million

plus decrease in accounts receivable $9 million

plus depreciation expense $20 million

minus decrease in salaries payable ($1 million)

cash flow from operating activities $169 million