Question

Shamrock Company's accounts receivable arising from sales to customers amounted to $142000 and $124000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $539000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Answer 1

$557,000

Step-by-step explanation:

Operating activities: It includes those transactions which affect the working capital. It means that the increase in current assets and a decrease in current liabilities would be deducted and a Decrease in current assets and an increase in current liabilities would be added.

The computation is shown below:

= Income reported on the income statement + decrease in account receivable

= $539,000 + $18,000

= $557,000

The decrease in account receivable

= $142,000 in beginning of the year - $124,000 in end of the year

= $18,000