Question

Part 2. Structured questions Q1. Yahoo company reports the following information $80000 8000 2000 Depreciation expenses Increase in accounts receivable - 30000 Prepare cash flow from operating activities?

Answer 1

To calculate the cash flow from operating activities, start with the net income (not provided), add back non-cash expenses such as depreciation, and adjust for working capital changes such as an increase in accounts receivable. The detailed calculation cannot be completed without the net income figure.

Step-by-step explanation:

The question asks to prepare the cash flow from operating activities for Yahoo company given certain financial information. To calculate the cash flow from operating activities, we need to adjust the net income for changes in working capital and non-cash expenses like depreciation. However, the net income figure is not provided in the information. Typically, we would start with the net income and add back non-cash expenses like depreciation, and then adjust for changes in working capital accounts such as an increase in accounts receivable. Unfortunately, with the provided figures alone (depreciation expenses and increase in accounts receivable), a definitive cash flow from operating activities cannot be determined without additional information such as net income.

Here's how you would usually approach it:

1. Start with net income (not given).
2. Add back non-cash expenses: Depreciation expenses of $8,000.
3. Adjust for changes in working capital: Subtract the increase in accounts receivable of $2,000.

The final cash flow from operating activities would typically be the net income plus depreciation expenses minus the increase in accounts receivable. Without the net income, we cannot complete this exercise accurately.