Question

Using The Data In The Tables Below, Compute Net Cash Flow From Operating Activities For Eureka Ruby, Inc. For Year 2: Eureka Ruby, Incorporated Balance Sheets For The Years Ending December 31 , (All Amounts Are In Dollars) Additional Data From Company Income Statement(S): - Sales In Year 2=5,792,000 - Net Income In Year 2=33,410 - Depreciation Expense In

Answer 1

In order to compute the net cash flow from operating activities for Eureka Ruby, Inc. for Year 2, we will use the information provided in the given tables. The additional data from the company income statement are as follows:Sales in Year 2 = $5,792,000Net Income in Year 2 = $33,410Depreciation Expense in Year 2 = $10,840The formula to compute net cash flow from operating activities is as follows:Net Cash Flow from Operating Activities = Net Income + Depreciation - Change in Operating Assets + Change in Operating Liabilities We will now calculate each of the components of this formula:1. Net Income: The net income for Year 2 is given as $33,410. Therefore, we can write:Net Income = $33,4102. Depreciation: The depreciation expense for Year 2 is given as $10,840. Therefore, we can write:Depreciation = $10,8403. Change in Operating Assets: The change in operating assets is the difference between the current year's value and the previous year's value. In this case, we only have the data for Year 2, so we cannot calculate the change. Therefore, we can write:Change in Operating Assets = 04. Change in Operating Liabilities: The change in operating liabilities is the difference between the current year's value and the previous year's value. In this case, we only have the data for Year 2, so we cannot calculate the change. Therefore, we can write:Change in Operating Liabilities = 0Now, we can substitute these values in the formula to get the net cash flow from operating activities:Net Cash Flow from Operating Activities = Net Income + Depreciation - Change in Operating Assets + Change in Operating LiabilitiesNet Cash Flow from Operating Activities = $33,410 + $10,840 - 0 + 0Net Cash Flow from Operating Activities = $44,250Therefore, the net cash flow from operating activities for Eureka Ruby, Inc. for Year 2 is $44,250.