Question

Siam Traders had Net Income for 2020 of $9,500,000. The firm invested $1,000,000 in manufacturing equipment during 2019 but made no additional capital investments in 2020. The equipment is being depreciated over five years using straight-line depreciation, starting in 2019. Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2020 with amounts in thousands.

Required:
What is the Net Cash Flow in 2020?

Answer 1

Cash flows from operating activities:

Net income $9,500,000

Adjustments

Depreciation Expense [$1,000,000/5 years] $200,000

Net cash flows from Operating activities $9,700

Cash flows from investing activities $0

Cash flows from investing activities $0

Net cash flow $9,700