Question

Lense Laboratories' net income was $330,000. Given the account information below, what is the net cashflows from operating activities for Lense Laboratories?Increase in Accounts Receivable $63,000 Increase in Salaries Payable $56,500 Decrease in Inventory $34,500 Depreciation Expense $46,500 Increase in Prepaid Insurance $3,900 a) $413,600 b) $534,400 c) $400,600 d) $339,400

Answer 1

The net cashflows from operating activities for Lense Laboratories is $413,600.

Step-by-step explanation:

To calculate the net cashflows from operating activities for Lense Laboratories, we need to consider the changes in various accounts. We add the increase in accounts receivable and the decrease in inventory because these represent cash outflows from operating activities. We deduct the increase in salaries payable and the increase in prepaid insurance because these represent cash inflows from operating activities. Finally, we add depreciation expense since it is a non-cash expense.

Using the given account information:

• Increase in Accounts Receivable: $63,000
• Increase in Salaries Payable: $56,500
• Decrease in Inventory: $34,500
• Depreciation Expense: $46,500
• Increase in Prepaid Insurance: $3,900

Net Cashflows from operating activities = (Increase in Accounts Receivable + Decrease in Inventory + Depreciation Expense) - (Increase in Salaries Payable + Increase in Prepaid Insurance)

Net Cashflows from operating activities = ($63,000 + (-$34,500) + $46,500) - ($56,500 + $3,900) = $413,600

Therefore, the net cashflows from operating activities for Lense Laboratories is $413,600

Answer 2

Answer: The answer is b $534,400

Step-by-step explanation:

$

Net income. 330,000

Depreciation expense. 46,500

Increase in prepaid insurance. 3,900

Changes in operating Asset and Liabilities

Decrease in inventory. 34,500

Increase in Account Receivable. 63,000

Increase in salaries payable. 56,500

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Net operating cash flow. 534,400

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